THE SLEEPY BOARD

A Testamentary Gift

The bequest was both unexpected and the largest ever received by the community foundation.? The now deceased donor had been active on the foundation’s board.? That involvement had become one of his major volunteer efforts after he had sold his regional educational publications distribution business to one of the major national wholesalers.? Acceptance of his gift endowment stipulated that the funds be employed to promote elementary education within the community foundation’s footprint.? Distribution of the funds were to be reviewed and approved by a board of directors that met at least annually.? The foundation’s leadership happily accepted this contribution along with its requirements.

Creating the oversight board was an easy task for the foundation’s executive director.? She simply contacted the donor’s friends and former colleagues.? All were pleased to honor his legacy by serving on an endowment board whose time obligations they were told would be minor.? Many of those, like the donor, had been involved in primary education, as former teachers, principals and consultants.? At the first meeting of this new board, a set of bylaws crafted by the foundation’s legal counsel was approved, and a chair was elected in accordance with the new bylaws.? The chair’s only responsibilities appeared to be limited to scheduling and running the annual meeting.? Both the community foundation’s website and its next annual report duly noted the availability of endowment funds for the purposes detailed in the bequest.?

By the second meeting, these announcements had attracted just two qualified requests for grants.? Unfortunately, these did not total close to the target 15% distribution rule the overseeing foundation had adopted but rarely enforced.? The business portion of the meeting concluded quickly, with the remainder of the time filled by recalling the good works and amusing anecdotes about the donor, plus catching up between longtime colleagues.? This pattern continued for a few years, few requests and minimal distribution, with time for socializing.

The fourth year’s endowment board meeting included acceptance of the resignation of a board member who was moving permanently to the Florida Gulf Coast.? Looking around the conference room at the remaining board members, the chair remarked that perhaps this was an opportunity to bring on younger members in anticipation that among the group assembled, most would likely be choosing a similar permanent move south or otherwise be unable to serve in a few years.? All agreed, though one member noted that membership on this board was hardly demanding.

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A New Board Member

That was how Ruth joined this board.? Unlike many of her high school peers, she had returned to her hometown after four years of college and then law school.? She had found a position at a local firm specializing in litigation, and then followed her parents’ example as a willing volunteer on a few local boards.? Her parents’ reputation was enough to vouch for her, and members of those boards soon set aside their memory of Ruth as a young girl, perhaps even the friend of their own children who had not returned to the city.? She was bright, articulate, connected and it was easy to foresee her someday chairing some of the most important civic boards in the city, especially given the local bias to elevating “home grown talent.”

Ruth followed the rule gifted to her by a law school mentor:? for the first three months in a new position, just observe and hold off questioning practices or recommending changes.? In the case of this board position, that acclimation period started at her first board meeting, after she was quickly nominated and voted on at the beginning of the meeting while she waited outside the conference room door.? In the next few months, she met with the board chair for coffee and separately with two other board members who were not coincidently longtime friends of her parents.? Finally, she met with the foundation executive director to seek answers to a list of questions she had developed over those three months.

“Why does this board only have a chair, per the bylaws?” was the first and least challenging inquiry.

The executive director gave Ruth a bit too detailed account of how the legacy gift had established the endowment and the requirement for the board, how the bylaws were developed and approved, and how the chair was elected.? Ruth knew all this, but listened intently and nodded dutifully.? The next question, to which Ruth was pretty sure she also knew the answer, was, “Why has the board invested so little money in community elementary education?”

This startled the executive director for a moment, but then launched her to recite exactly just how much money had been granted.? Ruth acknowledged the executive director’s perspective that this amount was significant in comparison to the average family income in the city.? However, it was less than 10 percent of the? current fund value, and mostly came from earnings on principal.? The executive director then pivoted to extoll how much the community foundation as a whole had distributed over the years.? Ruth knew these numbers too, as well how much of the outflow was paid out from donor advised funds and how much less was earmarked from endowments not established to support particular non-profit institutions.? Again, she smiled and dutifully nodded.

Ruth next offered an observation about how low the standardized test scores were in the city compared to the suburban school systems, and that surely the funds could be used to support programs that would help those city students while adhering to the provisions of the endowment.? Another long pause from the executive director, who then explained that almost every qualified grant request had been fully funded.? Also noted was that the availability of these funds was advertised both in the annual report and on the website.? As if suddenly remembering that Ruth was an attorney, the executive director added that Ruth of course could review all the records to satisfy herself that the board was executing its fiduciary duty.

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A Nodal Intervention

A month prior to the next annual board meeting, Ruth asked the chair if she could have 10 minutes on the agenda to present a funding option to the board.? The chair was pleased by Ruth’s initiative, but not so interested as to ask what the initiative might be.? At the board meeting, with a little too much of a laudatory introduction, the chair directed Ruth to proceed.? Fighting the urge to stand up, too much like a school girl or an attorney in court, Ruth presented some of the same statistics about the quality of the primary education in the city as she had shared with executive director several months ago.? Ruth even nodded to the executive director, recalling to the board that earlier conversation.?

In the remainder of the ten minutes, Ruth identified five local non-profits that were partnering with the city school system to improve elementary education.? She reported that she had met with staff and volunteer leaders of each of those agencies.? None of them had been aware of the availability of these endowment funds, despite regular internet searches for grant opportunities.? All five were now developing grant requests using formats developed by other foundations, as this foundation did not have a standard form.? Ruth finished her allotted time by asking her new fellow board members if they would be open to having a special meeting in the next two months, as already allowed by the bylaws, to consider these requests.

She had hardly finished when it seemed that everyone started speaking.? Expressions like, “that’s terrific,” “fantastic” and “that’s what we should have been doing all long” followed in quick succession.? Then board members seemed to suddenly recall other agencies in the city whose work would also benefit from grants.? One member shared that she was on another endowment board, and was sure she could secure their approval to allow this board to use their policy, procedures and forms to facilitate the grants.? Another board member offered to assist, and together they formed a grant application committee.? Three other board members then volunteered to perform the outreach to the other agencies on a list they were already compiling.? Ruth knew she was smiling too broadly, as she watched this sleepy board awaken and organically begin to structure itself to perform in the way its mission statement intended, each member claiming a role for themself.

Now 30 minutes passed the scheduled 1 hour duration of the meeting, the chair asked for a moment of everyone’s attention.? He first observed how pleased their departed patron would be at this discussion.? He then proposed that the board meet in two months to both review the grant applications Ruth told them to expect, and to further discuss this new direction.? Lastly, he jokingly took full credit for bringing Ruth onto the board.? Meeting adjourned.

Except, no one left the conference room.? They were all still buzzing with ideas.? Most came over to where Ruth was seated to congratulate her;? some had their calendars open to set a date to meet for coffee.? Ruth was amused the next day when her parents reported how many of Ruth’s fellow board members had called them to congratulate them on how well they had raised Ruth.? Parents and daughter next joked about how rebellious Ruth had been in high school and not someone other parents would commend.? Ruth then thanked her parents for the example they had set for her.? Never to pass up an opportunity, she ended the phones call by asking her parents what kind of legacy they were planning to leave, and offering them – pro bono – to set up an endowment to be sure their wishes were reasonably honored.