AGB has been collecting information on the composition and practices of the governing boards of both independent and public colleges and universities since the mid-1980s. In 2010 AGB conducted for the first time a companion study of the boards of college and university foundations.
Institutionally related foundations are typically corporations operating as publicly supported charities that raise and manage private support for public institutions. The degree to which foundations operate independently of the college or university that they are affiliated with varies enormously. Some foundations effectively function as a component or subsidiary of the primary institution while others are operationally autonomous.
Approximately half of all foundations described themselves as “independent,” and roughly a quarter of foundations described themselves as “dependent” or “interdependent.” Not surprisingly, larger foundations were far more likely to be independent: 51 percent of foundations with assets of $100 million to $500 million and 64 percent of foundations with assets over $500 million characterized themselves as independent.
Over a third of foundations in the study describe themselves as “almost wholly responsible for direction and execution of fund raising,” 16 percent of foundations direct and coordinate fund raising with support from institution staff, and just 7 percent play little or no role in fund raising.
In demographic terms, institutionally related foundation boards closely resemble the governing boards of both public and private colleges and universities. The percentage of female board members of foundations has increased by only 2 percent since 1995 and the percentage of non-white board members has increased by only 4 percent in the same period. The three most commonly represented professions of foundation board members are banking or finance, investment management, and law.
In other respects, and in keeping with the leading role they play in raising money and managing assets, foundation boards more closely resemble private-institution governing boards than public-institution boards. In addition to fulfilling basic governance and fiduciary responsibilities, 88 percent of foundations report that board members participate in the cultivation and solicitation of major gifts, and 81 percent report that board members serve as campaign leaders. This philanthropic focus is reflected in the size of foundation boards, committee structures, and board giving.
Foundation boards typically have 29 voting members and six non-voting members. This compares to average board sizes of 29 at private institutions and 12 at public institutions. The number of non-voting members reflects the fact that many foundation bylaws designate ex-officio seats, which are often non-voting, for the institution CEO, foundation CEO and other staff members, members of the institution governing board, or representatives of other affiliated organizations. The average number of emeriti board members (or board members with similar honorific status) was nine for foundation boards compared to 10 for private-institution boards. Most public-institution boards have no emeritus members.
More than three-quarters of foundations have a standing committee dedicated to development and fund raising compared to 89 percent of private institution boards and just one-third of public-institutionboards. As many as 84 percent of foundation boards have investment committees, compared to 48 percent of the boards of private colleges and just 13 percent of public institution boards.
Sixty-three percent of foundations require their board members to make minimum annual contributions. The average minimum contribution required was just over $2,700, and the highest required annual minimum was $12,500. Among those foundations that specify a minimum amount, the average is $8,404.
Eighty-two percent of foundations report that 80 percent or more of their board members made a financial contribution in the past year, compared with just 59 percent of public-institution board members and 85 percent of private-institution trustees. Many foundation boards have a significant number of ex-officio members which may tend to decrease reported rates of participation in annual giving since individuals may be serving on the board in a professional or representative capacity.
We don’t have data that allow us to precisely track changes in the fund-raising activity of foundation boards. But a survey conducted by AGB in 1995 indicates that foundation boards have greatly increased their involvement in fund raising. Sixteen years ago just 64 percent of foundations reported that 61 percent or more of their board members participated in fund-raising activities, 64 percent of foundations said that they had a standing development committee, and just 13 percent of foundations reported that 90 percent or more of board members provided gift support. The likelihood that states will be facing serious revenue gaps for years to come, along with the pressure to limit further tuition increases, suggests that foundations will continue to play an increasingly active role in raising private support for public higher education.