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You are viewing the Institutionally Related Foundation version of this CEO Update. An Institutions and Systems version is also available.
As public higher education faces compounding, complex pressures, one of the most important steps a foundation can take is to prepare its board through strong orientation and ongoing education. For foundation boards, that education must address finances and investment management, stewardship and donor trust, philanthropic leadership, and, critically, the institution-foundation partnership and the role the foundation plays in advancing the institution’s mission and strategic priorities.
Board orientation should foster an understanding of fiduciary duties of care, loyalty, and obedience; champion stewardship of charitable assets and principles of endowment governance; and map the distinct responsibilities of the foundation board, foundation CEO, institution president, and institutional governing board. It should also address board member expectations and responsibilities, foundation bylaws, committee charters and other governance documents, the memorandum of understanding with the institution, and information on how the foundation board conducts its business.
Ongoing education is just as important. Foundation boards need regular opportunities to deepen their understanding of the work of the foundation and to learn about new and evolving strategic challenges and opportunities. Changing regulatory or compliance requirements, leadership transitions at the institution and foundation, new strategic plans, campaign planning, real estate projects, or public-private partnerships all present occasions for board education that may take place during board meetings, committee sessions, workshops, and retreats. Joint board education sessions with institution leaders, other institution auxiliaries, or the institutional governing board all provide valuable opportunities to build relationships and enhance strategic alignment.
Done well, board education enhances both board knowledge and leadership readiness. It helps board members move beyond understanding their duties to applying them when donor expectations, market conditions, leadership transitions, or institutional priorities create difficult choices.
Not All Board Education Is Equal
While foundation or institution staff leaders, the foundation governance committee, or deeply experience board members facilitate much board education, foundation boards can also benefit from the external perspective provided by membership associations, consultants, law firms, investment advisers, fundraising firms, and others. Each may bring useful expertise, but boards should evaluate whether the guidance is grounded in a deep understanding of higher education foundation governance and supports the best interests of the foundation and institution.
Before selecting an educational partner, consider the following questions:
- Is the provider transparent? While institutional leaders provide most board education, boards should understand the background of outside organizations or individuals who develop the program, their funding sources, what interests they may represent, and whether they are disclosing potential conflicts.
- Does the provider understand institutionally related foundations? Foundation governance is not the same as corporate or general nonprofit governance, and foundation boards have separate responsibilities from the governing boards of their partner institutions. Facilitators should understand donor intent, charitable asset stewardship, the range of institution-foundation structures, advancement and other functions the foundation performs, and the varied responsibilities of foundation and institutional leaders.
- Is the education adaptable to the foundation’s structure and scale? Foundations vary widely in authority, staffing, endowment size, investment responsibilities, and relationship to the institution. Education should reflect those differences while reinforcing sound fiduciary practice and principles of trusteeship.
- Does the education lead to action? Effective education should clarify roles, strengthen the board chair-CEO partnership, and produce practical next steps to inform committee and board agendas, work plans, and potentially foundation policies and practices.
Athletics: A Foundation Governance Issue, Too
The rapid transformation of intercollegiate athletics can create significant implications for foundations. Revenue sharing; name, image, and likeness (NIL); donor-funded facilities and collectives; media rights; legal risk; and reputational concerns can affect fundraising strategy, gift agreements, donor expectations, and the foundation’s relationship with the institution.
In a recent AGB pulse survey of more than 200 higher education leaders, 61 percent of respondents from institutions with athletics programs said board oversight of athletics now requires at least as much attention as their other responsibilities. Yet only 32 percent said their boards are well prepared to fulfill their fiduciary responsibilities in today’s rapidly changing athletics landscape.
This fall, AGB will convene trustees, presidents, chancellors, athletic directors, chief financial officers, foundation leaders, and industry experts for an in-person conference focused on the rapidly changing landscape of intercollegiate athletics and its governance implications. The Governance Challenge in College Athletics will be held November 10–11 in Washington, DC. Foundation board members, CEOs, chief financial officers, alumni leaders, and others involved with athletics should consider attending together to better understand the decisions and challenges ahead.
Go Deeper with AGB Resources
AGB offers resources to help foundation boards strengthen trustee education, apply governance principles, and prepare for consequential decisions:
- Board Member Orientation—AGB’s self-paced online program gives new and experienced trustees an introduction or refresher on higher education governance, fiduciary duties, essential board responsibilities, and board culture. A foundation-specific track is available.
- An Anatomy of Good Board Governance in Higher Education—This practical framework provides a clear understanding of the best governance practices that work together to strengthen board effectiveness.
- Principles of Trusteeship—These nine principles focus on the attitudes and actions each trustee should embody as they work to fulfill their responsibilities on the board.
- How to Govern for Institutional Autonomy: A Practical Guide for Higher Education Boards—This guide provides tools and strategies to help boards navigate external governance challenges to ensure their decisions and actions are grounded in fiduciary duty, board independence, and mission-centered leadership.
- Athletics Knowledge Center—This hub provides questions, guidance, and curated resources to help boards understand their responsibilities for athletics policy, mission alignment, financial oversight, student-athlete well-being, transparency, integrity, and accountability. Register for AGB’s November 10–11 convening in Washington, DC.
A Prepared Foundation Board Is a Stronger Partner
Effective board education protects donor trust, strengthens stewardship, and helps the foundation stay aligned with institutional mission. It prepares trustees to ask better questions, make sound decisions, and support the CEO without moving into management.
As you prepare for the upcoming academic year, consider whether your board’s orientation and ongoing education are practical, foundation-specific, and connected to the decisions your trustees will be asked to make.
Thank you for your leadership and continued commitment to mission-centered governance and philanthropy.
