Workshop A: Foundation Governance

The fiduciary duties of foundation boards were widely discussed in this session facilitated by Volker Then, Managing Director of the Center for Social Investment (University of Heidelberg) with two thoughts in particular: the relationships between the board and its different stakeholders, and the options of the board to take care of asset management.

Bernhard Lorentz, Chair of the Executive Board of the Stiftung Mercator GmbH, opened the session with the idea that foundations should see in the crisis a strategic opportunity to start thinking about their leadership, about their impact beyond money. Becoming an advocacy player… a new mission implying that the board has a real strategic view of how to be an efficient player in the non-funding area, and how to work with other players from the non-profit sector or governments…

"foundations should see in the crisis a strategic opportunity to start thinking about their leadership"

Participants also underlined that the board should always maintain a certain level of dynamism within the foundation and with all of the foundation's stakeholders, that they should focus less on technicalities and more on core values, to facilitate communication around those values both inside and outside the foundation.

Regarding asset management, Stefan Stolte, Head of Legal at Der Stifterverband für die Deutsche Wissenschaft, mentioned the lack of internal skills in small and medium-sized foundations. Representing an umbrella foundation, he explained the benefits of this option, but others were reviewed as pooling or merging…

 

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Workshop B: Foundation Financial Management

The clearest message to come out of this workshop, facilitated by UK consultant David Carrington, was that the crisis presents a ‘now or never’ opportunity for mission related/connected investment. With very low returns on mainstream investments, MRI is more attractive than ever. Now is the time for foundation leaders to make the case for aligning investment strategies more closely with the values and aims of their foundations.  The Canopus Foundation makes a powerful case for MRI. It has suffered only marginal losses, all from Lehman holdings, explained founder Peter Heller, because it is mainly invested in solar and wind power – investments that are both in line with mission and more profitable than conventional investment products offered by the banking sector.

"the crisis presents a ‘now or never’ opportunity for mission related/connected investment"

Another question addressed by the workshop was whether foundations could reduce their own operating costs and the costs they impose on grantees. In general workshop participants expressed a clear willingness to look for ways to do so, for example through sharing back office functions, more creative use of IT, or making reporting requirements less burdensome.

Finally, the workshop looked at extending the ‘toolkit’. Are foundations starting to explore using loans and underwriting as well as grants to support their chosen causes? Again, foundations seem increasingly willing to look at this, though they are mostly more comfortable with the idea of extending the range of non-financial support, for example brokering other grants for their grantees and bringing grantees together to share knowledge, than with adopting new financial approaches.

 

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Workshop C: Foundation Role and Impact

Pier Mario Vello, Foundation Cariplo’s Executive Director made a very interesting introduction to the workshop “Foundation role and impact”: how can we challenge ways of assessing the crisis?  How can we define new management behaviour in an extremely fast-moving environment, while preserving values and sustainability of our organisations? He emphasized that one should never underestimate the power of ideas to bring change nor be afraid to question established rules.

On the question of spending in the next months, the foundations’ representatives agreed that they will not modify their grant–making strategies, but will most likely have to use their reserves as they have already done this year. Etienne Eichenberger, Executive Director of Wise and facilitator of the workshop, challenged the participants by reminding that for instance spending had fallen by 10% in the United Kingdom in the last months: the group agreed that 2010 may be more difficult than expected.

"one should never underestimate the power of ideas to bring change nor be afraid to question established rules"

On crisis management, participants stressed the need to bring about change in many different ways other than just spending, and to develop particularly the advocacy and agenda-setting role of foundations, directly or indirectly, by funding advocacy non-profits.

Finally, when asked how foundations should set the conditions for lasting impact, the workshop participants acknowledged that foundations should increasingly work with governments.

On that note, Jean-Lou Siweck, Luxembourg Government aide, closed the discussions by encouraging foundations to come up with innovation, best practices and new ideas that governments would most likely learn from and support.