While volunteer recruitment is a constant task for nonprofits, under the customary radar operates a lesser-known trade in the matching of social elites for foundation boards.
Necessity has given rise to a new and very discreet consulting practice, in which essentially covert guides make this match happen for people seeking appointment to foundation boards. This is very discreet professional help —- so discreet that none of the six trusteeship “placers” were willing to be interviewed by name, and several asked that this article not be written in the first place. Two of the matchmakers denied the very existence of their actions—or that it could be done—even if someone wanted to do it—which they said no one does.
The most discreet service of all places socially important but economically strapped community leaders on the crème-de-la-crème of nonprofit boards—private foundations that pay more than $100,000 in trustee fees. Each year this fiercely competitive process is played out with brutal finesse in the most genteel and sophisticated salons and foundation boardrooms of the United States.
A prominent foundation board member from Philadelphia (who asked that his hyphenated Anglo-Saxon family name not be used) admitted that the key to his appointment was “A decent social profile, un petit savoir faire, and [his matchmaker’s] connections at the right time.” Behind-the-scenes competition for the 1,125 U.S. foundation trusteeships that pay more than $100,000 a year makes the admission process to the best Manhattan preschools look like a Wal-Mart card application.
When asked about paid trustee placement, the president of the Association of Large Foundations, Yusef Arak, snorted, “You’re making this up! It just does not happen this way, and besides, you’ll never be able to prove it.”
Of course, there is generally no real problem finding people who would accept the special perquisites of foundation trusteeship, but these are institutions that feel they cannot take just anyone. While Simone Auchincloss said her foundation would never need such a service, she was sympathetic to the need for properly qualified trustees. “For one, it requires a deep understanding of the philanthropic responsibility,” Ms. Auchincloss said from her New York apartment, “and a working familiarity with large assets. The sensitivity of the decisions made in foundation boards cannot be overstated -— the need for confidential review is obvious.”
The bottom line? The duty of loyalty. To maintain the t rust and candor required for serious evaluation of proposals,
the deliberations, motivations and personal asides in foundation deliberations are kept under tight wraps. For the same reason that the dustbin emptier for the Federal Reserve Board of Governors is paid $80,000 a year, foundations pay a premium to assure confidentiality and discretion.
Time and work requirements vary for trustees, but the duties are not considered onerous—reading memoranda and reports and taking part in lengthy and regular meetings in comfortable surroundings. “There is no doubt that being a trustee of a major foundation involves work—usually consultation, not creation,” said Barry Smithson, who just completed his service as a trustee of the Pinzels-Price Foundation. “We express preferences of one thing over another, and talk about the consequences, but there’s definitely no collating,” Smithson said.
“Boards like this need trustees for their critical thinking and knowledge of the community—you just get to know what’s expected of you,” according to Smithson, who received just over $1.7 million for his 12 years of board service.Ms. S M , who has served in three well compensated trusteeships, emphasized the massive information flow of reports, reviews and recommendations that trustees must read. “It’s no small thing. Over the last 15 years I can’t think of a plane or a resort where I haven’t been lugging a briefcase full of board books. My son Chaz says I’m becoming a bag lady!” Ms. M chortled from her home overlooking Biscayne Bay.
Highly compensated trustee openings are enviously referred to as “gravy spots” by trustees of uncompensated (though equally important) foundation and nonprofit boards. Can aspiring foundation board members navigate this process alone? Probably not, says the most candid of the trustee matchmakers. “Not if they want to attend board meetings in Bellagio, Italy, discussing poverty in California,” he said — with free travel, lodging and regional cuisine on top of a $130,000 trustee fee. A delicate aspect of obtaining a $100,000 foundation board position is that it must never be known that the individual could actually use (let alone need) the money. Speaking on condition of absolute anonymity, one 20-year trustee admitted that foundation stipends were his primary source of income. “If anyone found this out, I would never be reappointed,” he moaned.
Recent negative media attention on trustee fees has added to doubts about the legitimacy of foundation governance. Studies going back 30 years have documented small numbers of racial and ethnic minorities, women or just plain citizens on foundation boards, and greatly limited progress has been made to diversify foundation boards. In the foundation field there is no consensus for what composition is most appropriate for private groups that assess and allocate for the public benefit, adding to the inertia.
Simone Auchincloss doesn’t defend the arrangement but sees its advantage of avoiding contentious social and economic questions and what she terms “class warfare.” “Most of us have made our peace with the existing structure of society. This is an arrangement that prevents factions by using social elites not as a ruling class, but as generous community leaders,” Auchincloss said.
U.S. nonprofits have discovered just how important this leadership function is, with continued shifts in income and wealth. Elvira Madigan, director of the Development Director Roundtable in Minneapolis, sees this on a daily basis. “Twenty years ago, many of our organizations reported that 80 percent of their donations came from the top 20 percent of their donors,” Madigan said, “but now it is 90 percent coming from the top 10 percent.” Madigan’s group and others increasingly cite the need for bridging mechanisms to the wealthy, and industry observers predict a growing role for consultants and intrusive software to connect the dots.
Are trustee matchmakers an illegitimate method to steer qualified people to trustee seats? Arak from the foundation trade group concludes that no laws have been broken. “Influence peddling is everywhere —- from Hollywood and Wall Street to K Street,” Arak said in Washington. “Foundations are part of the same society, but I think we can do better.”
Pulling the curtain away to reveal the competition for “gravy spots” may spoil idealists’ image of a pristine (if prissy) organized philanthropy. Nevertheless, in a highly competitive society, it should surprise no one that the ambitious competitive spirit of America extends to those who want to do good with other people’s money (and don’t mind getting some for themselves in the process).
Phil Anthrop is a consultant to foundations in G-8 countries.