Foundations’ Governance & Support Actions toward Strategich Philanthropy

Should non-profit organizations' leaders rely on enhanced governance mechanisms to optimize the social outcomes of the philanthropic strategies their organizations implement? The recent literature on the non-profit sector has investigated the composition, role, responsibilities, and characteristics of non-profits' boards. However, there is a lack of research on the causal link between governance practices and effective philanthropic strategy. This gap should be filled because non-profit organizations are increasingly pivotal elements of the “private welfare state” that exists in Europe and the OCSE. While other kinds of organizations that are involved in philanthropy and public welfare face competition (i.e., corporations), budget constraints (i.e., governments), or fundraising imperatives (i.e., NGOs) that limit their ability to address public welfare, private endowed foundations feel less such pressure, so they can tackle social issues that other organizations or individual donors may not. The purpose of this paper is to present the second survey, which will enlarge an existing pilot study on 112 large Italian foundations, the exploratory results of which show strong correlations between sophisticated governance and more challenging philanthropic strategies. Using a second on-line survey and ex-post structured interviews, the research team is currently collecting data from a representative sample of board members of Italian foundations with the goal of investigating the relevance of factors like board capital, board processes, philanthropic culture, and board leadership in optimizing foundations' grant-making processes and social welfare creation strategies. The results of the study should reveal whether and when well governed private foundations can spend money more effectively and efficiently than individual donors and poorly governed foundations can.