Mismanaging Your Foundation – and How to Prevent It

Managing a foundation amounts to doing something good and right? Right? Wrong. There is so much you can, and do, mess up.

by Stefan Shaw, June 22, 2021
How to Prevent Messing up Foundations
This article originally appeared here in 2018. 

When you set about managing a foundation, you land in a closed system. Considering the amount of public esteem and personal regard for those in this field, it is easy to give in to the belief that you must be making a huge difference just by being involved in it. Managing a foundation in itself already amounts to an intention to do good. To do what is right. To do what is right and good. Surely you can't mess that up? But you can. Very much so.

Failure is not inevitable. Based on our experience in working with foundations, we have a few friendly words of advice for prospective foundation managers who don't want to mess up: 

1. Don't be self-important 

As the manager of a foundation you will find yourself in a very comfortable situation. You do not have to earn the money that you spend, nor do you personally have to prove yourself to a charitable organisation in the field. Instead, your position is comfortably in between the two. The money - sometimes more, sometimes less - is simply there. Non-profit organisations approach you for support. Your friends think that what you do is admirable. Your sponsorships. Your projects. There should be more people like you. And nobody asks you about what you've actually achieved. 

These are all good reasons why you might think of yourself as pretty important. You're not. Those who earn the money that you spend are important. So are those who use the money that you manage, to achieve the goals that you believe are important.

2. Do not follow your heart 

In order to reach as many people as possible, the projects that you support and carry out have to be effective. As a rule, these are not the projects and issues that have always interested you. They are likely to be different ones. 

A measure is not effective because you think it is – it is effective if it has been proven effective according to sound scientific methods. Effectiveness does not result from the claim that you are pursuing effectiveness. Nor is it a result of participation in effectiveness workshops. And nor is it limited by potential effectiveness. 

If you want to know what is effective, talking about it won't help you. You need to read about it and understand it. Do not follow your heart. Follow your mind.

3. Be transparent 

Your sponsors typically make their contributions to your foundation tax deductible. Therefore, a large proportion of the funds at your disposal will be tax revenue. 

If you're spending our money, we have a right to know how you're spending it. The employees you engage, the tools you develop, the know-how you acquire – we taxpayers are helping to pay for all of these. Therefore it is your responsibility to share your activities, your methods and your results with us, so that we can build on them. 

4. Avoid conferences 

At first glance, conferences and summits appear to provide knowledge or even insights. However, this is rarely the case. First and foremost, what they provide is group membership and self-affirmation. Well-intentioned people meet other well-intentioned people, hold well-intentioned conversations and eventually part ways with well intentions. Nobody here needs convincing, because everybody is already on the same side – the right side.

If there's a lecture topic that interests you, ask the lecturer to send you the notes, request the relevant literature and set up a telephone meeting to learn more. Be prepared for the lecturer to be surprised by your request. 

5. Make it easy 

The non-profit organisations that apply to you are dependent on you. Deal with this situation responsibly. If a funding doesn't come into question, let them know in time so that they can find alternative means. If a funding does come into question, do not force the non-profits to tailor their application to your expectations - decide whether a funding according to their expectations is feasible. 

Do not force them to fill out standardised application forms that make it easy for you. Let them send you the information that they already have at hand. Make it easy for them and save their time. They have more important things to do than making your work easier.

6. Stay small 

Because efficacy still isn't seen as an indicator of a foundation's achievement, the public perception of a foundation manager's impact is determined by the size of his organisation. The temptation to build up an extensive team is therefore correspondingly large. 

The larger your team becomes, the more time and money you need to spend on organising yourselves or on coming up with tasks that you might as well do when there's nothing else to do – like creating time-consuming annual reports that are kindly acknowledged by all your fleeting acquaintances from conferences, but nobody actually reads.

Foundation work is not a complex business in itself. As a rule, the target areas that you intend to focus your activities on are made clear from the outset. Once a project has been adopted, it usually extends over a period of several years. Funds are limited. Once you have identified the fields and projects that your organisation will be involved in, there is often not much left to do. Every additional employee that you do not hire is real money that you could invest in other useful projects. 

7. Pay well 

The assumed importance of the work in the social sector is one factor for attracting talent. Money is the other. As long as foundations pay their employees badly, they will attract employees who are less educated and less ambitious than those who apply to other employers. 

If you want to do good work, you need a good team. If you are prepared to work with a small team, you can afford to pay well.

8. Be a woman 

Conferences and meetings in the foundation sector are reminiscent of the traditions at Rotary clubs. Distinguished gentlemen exchange cultivated pleasantries about the social issues of the day in a pleasant atmosphere. The unspoken pecking order corresponds to the amount of foundation capital and the number of employees. One does not argue about the best way to do things here. One knows how to behave oneself. Also, one rarely sees women in leadership positions. The few women who have made it to the top of a foundation have better things to do. Their teams are smaller, their societal concern is more pronounced, and their goals are clearly defined and more ambitious. If you aren't a woman, follow their example. 

The new generation of foundation managers is prepared to not only claim their responsibility but to actually take it. Here’s to you.

This article was contributed by Stefan Shaw from the Benckiser Stiftung Zukunft.  The Benckiser Stiftung Zukunft is a German foundation passionately committed to identifying, developing and funding results-driven social projects. 

Questions, concerns or comments? Send the author an email. 

Originally published April 24, 2017