AGB President & CEO Update: The Foundation Board’s Role in Supporting Institutional Transformation (Foundation)

You are viewing the Institutionally Related Foundation version of this CEO Update. An Institutions and Systems version is also available.

Foundation boards are being challenged to think differently about how they support their institutions in a higher education environment shaped by demographic change, technological disruption, artificial intelligence (AI), evolving learner expectations, financial pressures, and an increasingly dynamic public policy landscape.

Preserving what makes an institution distinctive while adapting to the realities of today’s environment requires both institution and foundation boards to view business model innovation and long-term institutional sustainability as important strategic governance priorities.

Below are fundamental questions that foundation boards should be asking.

• Are our philanthropic priorities aligned with the institution’s most important strategic needs?
• How can the foundation help support programs and initiatives that respond to changing learner and workforce needs?
• Is the institution effectively utilizing foundation resources and assets to maximize mission impact?
• Where can philanthropy help the institution test new ideas, build capacity, or invest in innovation?
• How can the foundation help strengthen the institution’s long-term financial resilience while remaining focused on mission and student success?
• Does the foundation have a sustainable business model and how might changes in the way our partner institution fulfills its mission impact fundraising strategy and philanthropic support?

Every institution and foundation will begin this work from a different place. Some institutions believe their current models remain sustainable, while others are actively considering significant change. Many are redesigning enrollment strategies and academic portfolios, exploring alternative revenue opportunities, integrating AI, forming strategic partnerships, and rethinking how they use institutional assets. No matter where an institution falls on this continuum, the foundation board has an important role in ensuring that its resources, strategies, and priorities are aligned with the institution’s mission and long-term direction.

Advancing business model innovation requires a close partnership between foundation boards, institutional governing boards, presidents, and foundation leaders. That means building trust, maintaining clarity about roles, asking difficult questions, aligning philanthropic investments with strategic priorities, and creating the flexibility to support new opportunities as they emerge.

The institutions and foundations that evolve while remaining anchored in why they exist will be best positioned to thrive.

Institutional Business Models Are Changing. Is Your Foundation Ready?

In an August 2026 AGB pulse survey of more than 200 members, 90 percent said their board is evaluating or implementing changes to their institution’s business model. Yet among those, 37 percent said they either lack a plan or lack confidence in the plan they have.

For foundation boards, these findings have important implications. As institutions rethink how they operate and fulfill their missions, foundations need to understand where their institutions are headed and consider how those changes could affect philanthropic priorities, fundraising strategies, investment decisions, and the deployment of foundation resources.

Recent federal actions and calls for institutional change have also driven significant discussion across higher education. External pressures will continue to evolve, but fiduciary responsibilities remain constant.

Foundation boards must exercise independent judgment, safeguard donor intent and foundation assets, remain aligned with institutional mission, and ensure their decisions support the long-term interests of the institutions and students they serve—not short-term political or market pressures.

A Strategic Partner in Institutional Sustainability

Institutionally related foundations can play an especially important role as colleges and universities consider new approaches to sustainability and growth.

Foundations can provide flexibility that institutions may not always have. They can help support innovation, facilitate public-private partnerships, participate in real estate and development opportunities, strengthen relationships with employers and communities, and help institutions build the financial capacity needed to pursue strategic priorities.

But these opportunities also require disciplined governance.

Foundation boards should understand the risks, clarify roles between the institution and foundation, evaluate opportunities against mission and strategy, and ensure that financial decisions reflect both current needs and long-term stewardship.

That is particularly important when considering areas such as strategic partnerships, real estate, alternative revenue opportunities, and endowment management.

AGB Resources to Guide Foundation Boards

• Knowledge Center: Finance and Business Model Innovation – AGB’s collection of research, tools, and guidance on financial sustainability, strategic transformation, governance, and business model innovation.
• 2027 Foundation Leadership Forum—A conference that brings together foundation board members and leaders to strengthen strategic alignment with their institutions, navigate a changing higher education and philanthropic landscape, and advance governance, stewardship, fundraising, investment, and entrepreneurial strategies that support long-term institutional success.
• AGB Consulting: Business Model Innovation—Expert support in assessing institutional viability, identifying opportunities for innovation, and developing sustainable business models aligned with institutional mission.
• Mergers and Affiliations Toolkit—Guidance to help boards evaluate strategic partnerships, affiliations, mergers, and other options that may strengthen institutional sustainability and advance mission.
• Higher Education Real Estate Ventures—Practical guidance and case studies to help boards think strategically about real estate and physical assets as tools for advancing institutional priorities and financial sustainability.
• Endowment Management for Higher Education, Second Edition—Guidance on fiduciary responsibilities, investment strategy, spending policy, risk, and long-term stewardship of endowment assets.
• Institute for Foundation Board Leaders and Chief Executives—An interactive retreat where small teams of foundation leaders learn to strengthen the CEO-board chair partnership, elevate the work of the board, enhance institution-foundation alignment, and more effectively fulfill the foundation’s mission of support.

Foundation boards have a fiduciary responsibility to regularly assess whether their strategies, resources, and priorities are positioned to support the institution’s long-term success.

The strongest foundations will do more than respond to immediate fundraising needs. They will work in close partnership with institutional leaders to identify emerging opportunities, strengthen financial resilience, support thoughtful innovation, and ensure that philanthropic resources have the greatest possible mission impact.

That is the promise of effective foundation governance—and the work AGB is proud to advance alongside our members every day.