Geographic dispersion

Foundations & Endowments

A challenge facing private foundations and the next generation of philanthropy

Our world—governments, economies, cultures, and even our families—is more connected today than at any previous time in history. As Thomas Friedman described in the New York Times, “What happened over the last years is that there was a massive investment in technology, especially in the bubble era, when hundreds of millions of dollars were invested in putting broadband connectivity around the world…they created a platform where intellectual work, intellectual capital, could be delivered from anywhere…and this gave a whole new degree of freedom to the way we do work.”Disclosure 1

Connectivity impacts governance and grantmaking

This increased level of connection has the ability to increase our familiarity with (and mobility between) places and people geographically far away. In turn, it also directly affects the governance and grantmaking of private foundations. Decisions are generally made by a collection of directors, trustees, and advisors. Yet it’s more likely today that these decision-makers are geographically dispersed, with widely different perspectives and interests. A Pew Research Center survey found that most Americans move to a new community at least once in their lives, and the National Center for Family Philanthropy notes that 40% of foundation board members say younger family members have moved away from the foundation’s geographic location.Disclosure 2

Given the impact of these changes, it’s often helpful for a donor to specify a foundation’s programmatic and geographic focus. However, in those circumstances when a donor doesn’t specify such priorities, your foundation’s board must often work to define them. As it relates to geography, donors are giving less direction than they have in the past. According to the National Center for Family Philanthropy, only about 40% of foundations created since 2010 focus their giving on geography—whereas geography is a focus for 80% of foundations created before 1970.”Disclosure 2

For private foundation boards dealing with geographic dispersion, it’s important to answer critical questions prior to awarding grants and establishing a strategy:

  • Did the donor direct the board to restrict grantmaking to a specific geographic area?
  • Does your foundation prefer to focus on providing community support by programmatic area (for example, prioritizing the issue of homelessness or early childhood education)?
  • Or, do you turn your attention to a specific geographic area—perhaps where the wealth was created—and worry less about specific program areas?
  • If you’re running a family foundation, is family engagement a priority? If so, some level of flexibility in grantmaking will likely help to encompass the wide-ranging interests of family members.

Once your foundation’s grantmaking priorities regarding a geographic focus area are established, the increasing geographic dispersion of board members then presents a new set of challenges to foundation governance.

First, your foundation must work to maintain focus on its mission and grantmaking impact, particularly if there’s a specific, defined geographic focus other than where many board members live. When board members’ lives are centered in differing locations, often too are their giving interests. Secondly, your foundation should work to ensure active communication and engagement from board members when in-person interaction is difficult or impractical. Finally, for family foundations, geographic dispersion of family members often makes maintaining a family legacy more complex.

Case studies: foundations with a defined geographic focus

The A Foundation focuses its grantmaking on a rural community in the Southeast. The geographic focus was not directed by the donor, but was rather a board decision based on where the donor’s wealth was accumulated. Half the board members live in that community. The foundation meets bi-annually in the location of geographic focus, and follows each meeting with a grantee site visit to help board members—particularly those who live outside the community—remain engaged in its work. Board members also often seek counsel from long-time grantees who are trusted leaders in the community.

An independent foundation, The B Foundation makes grants that are restricted by the donor not only by area of need, but also geographically to a particular state. The board faced a challenge in recent years when two valued members moved out of state. After thoughtful discussion, both members were asked to remain involved due to their valuable contributions and have begun inviting grantees to present at meetings for the out-of-state board members who cannot regularly attend site visits. The foundation also periodically hosts an event to convene both grantees and other interested parties, in an effort to build and maintain connections.

The C Foundation is a large, family foundation several generations removed from the donor. While the board decided much of the grantmaking would support the rural area where the family and its wealth originated, a small percentage of grants are given outside that geographic focus to organizations of interest to board members. Two meetings are held each year. One meeting is held in the area of geographic focus to maintain connectivity there. The location of the second meeting rotates among hometowns of board members who live outside the focus area to foster greater family member engagement.

Unlike the previous examples, The D Foundation (a smaller, independent foundation) requires that any board member live in the metropolitan area of its geographic focus. If a board member moves away or otherwise wishes to no longer be involved, they have the ability to name a successor board member, pending approval from the rest of the board. 

Case studies: foundations with NO defined geographic focus

The E Foundation is a large, family foundation. Its mission statement incorporates language to allow the organization to give where family (board) members live and express interest, so long as the grant purpose fulfills the charitable aspect of the mission statement. Additionally, meeting participation by board members and personal involvement, both financially and with their time, is preferred when the board considers grant applications. The geographic flexibility of this arrangement provides for a high level of engagement by family members, but the restrictions ensure the foundation remains focused on its mission.

Navigating an internationally dispersed family and with very little direction from the donor, The F Foundation incorporates both a senior and junior board—balancing the individually-directed grantmaking of the older generation with the wishes of the younger generation, to engage in a more collective grantmaking strategy. Separating the boards also minimizes the effects of the geographic dispersion, as the junior board is more adept at utilizing technology to maintain communication throughout the year. The foundation holds an in-person meeting once a year at a different location—with a focus on grantee presentations, to connect all board members to its work and foster deeper connections among family members.

An independent foundation, The G Foundation is guided by its governing document to direct a high percentage of grantmaking towards a specific program area—with no mention of geography. The board meets twice annually, once at a grantee (or potential grantee’s) location to incorporate an in-depth, day-long site visit to the meeting agenda. Other grantees also make presentations at the meeting by teleconference or video phone. The second meeting each year is held at a location central to most board members and focuses on governance and investment related issues.

Best practices to address geographic dispersion challenges

Geographic Dispersion Challenges
Challenge: Focus on the Mission Challenge: Engagement & Communication Challenge: Family Connectivity
Lean on community-based leaders as advisors (whether they serve on the foundation board as voting members or in an advisory-only capacity) to better understand community needs Site visits, either in person or by phone/video, to connect board members with the importance of the work of the foundation Host family meetings in rotating locations, perhaps with a social component to encourage a focus on family legacy
Convene grantee gaterings to amplify the work of the foundation's grantmaking programs Utilize technology: meeting scheduling tools, phone/video conferencing, document sharing, website board portals Establish flexible grantmaking guidelines to allow for individual interests and passions
Encourage board members to "champion" grant requests and make presentations on behalf of those organizations Incorporate a matching grants program, if appropriate, to engage dispersed board members Keep family/board members up to-date on status of grantee work in between meetings
Utilize a community foundation for small percentage of giving if no board member is familiar with the geographic area Consider sub-committees or boards: for example, Senior and Junior, or Investments, Governance, and Grantmaking Utilize regional foundation associations for continuing education to be shared at future meeting

About Truist Foundations and Endowments Specialty Practice

Truist has more than a century of experience working with not-for-profit organizations. Fiduciary stewardship is the heart of our culture. We’re not just a provider, but an invested partner—sharing responsibility for prudent management of not-for-profit assets. Our client commitment, not-for-profit experience, and fiduciary culture are significant advantages for our clients and set us apart. The Foundations and Endowments Specialty Practice works exclusively with not-for- profit organizations. Our institutional teams include professionals with extensive not-for-profit expertise. These professionals are actively engaged in the not-for profit community and are able to share best practices that are meaningful to their clients. Team members offer guidance and advice tailored to the various subsets of the not-for-profit community, including trade associations and membership organizations. Our Practice delivers comprehensive investment advisory, administration, planned giving, custody, trust and fiduciary services to trade associations, educational institutions, foundations, endowments and other not-for profit clients across the country.

Looking to strengthen your foundation’s grantmaking and governance given a geographically disperse board? 

Contact your Truist relationship manager or investment advisor or call us at 866-223-1499.