Creating a Culture of Ethics and Accountability

Transcription

1 Creating a Culture of Ethics and Accountability Speakers: Alan F. Rothschild, Jr., President, Mildred Miller Fort Foundation John Tyler, General Counsel & Corporate Secretary, Ewing Marion Kauffman Foundation Moderator: Mary Humann Judson, President, The Goizueta Foundation SECF 2016 Annual Meeting

2 Hypothetical: Sharing Grant Information/Outcomes The Howell-Johnson Foundation is a 50-year old family foundation based in Savannah, Georgia. About five years ago, the Foundation funded a significant grant for a major addition to a local homeless shelter. Unfortunately, the homeless shelter was not able to raise all of the funds needed to complete the shelter and was forced to borrow a significant part of the construction costs. The Foundation was recently approached by the CEO of the homeless shelter to discuss its now precarious financial situation and to seek an emergency grant to cover past due mortgage payments. The homeless shelter also approached the Savannah Community Foundation seeking funds for its general operations. Anita Patel, the Executive Director of the Howell- Johnson Foundation, has been contacted by the Grants Administrator of the Savannah Community Foundation as a grant reference for the homeless shelter. Anita is fearful that the homeless shelter will not be able to meet its financial obligations and be forced to close or significantly downgrade its operations. How should Anita respond to the request for information from the Community Foundation? Does it matter that the homeless sheltered offered the Howell-Johnson Foundation as a reference? What if Anita found out about the homeless shelter s current financial situation because she is a board member of the homeless shelter, not through the emergency grant solicitation? 2

3 Hypothetical: Managing Generational Issues in Foundations The Do Good Foundation is a 75-year old family foundation in Orlando, Florida, founded and funded by Harry and Honey Wiley. The organizational documents for the Foundation provide that the purpose of the Foundation is to support the Orlando Catholic community and to improve the quality of life in Orlando. Because of the evolution of Orlando into a tourist mecca, only the 2nd generation of the Wiley family still lives in Orlando. The 3 rd and 4 th generations have dispersed to Palm Beach, Palm Springs and the Maine coast. There are currently seven Wiley family members serving on the Foundation board, two Orlando-based 2 nd generation family members, who are now in their 80s, and five 3 rd and 4 th generation family members, none of whom still call Orlando home (the 4 th generation members never did). One of the 4 th generation trustees has begun advocating for two grants to his hometown of Palm Springs, a $100,000 grant to support the local art museum s capital campaign and a $25,000 grant to improve the Sunday School classroom at the Evangelical Christian Church which his family attends. What are the ethical and practical issues raised by this very common fact pattern? 3

4 Hypothetical: Identifying and Managing Conflicts of Interest: Nancy Flowers is the daughter of the founder of the Birmingham-based Flowers Family Foundation and currently serves on its board. Nancy has been approached by the University of Alabama Birmingham Medical School Foundation about a significant capital grant for a new building on the University of Alabama Birmingham ( UAB ) Medical Center s campus. Although the Flowers Family Foundation has never supported the UAB Medical School in the past, it has funded other healthcare initiatives in Birmingham, including an indigent healthcare center for the local Catholic hospital, on whose board Nancy s father served. Nancy s daughter, Elaine, is a pre-med student at the University of Alabama and has recently submitted her application to UAB Medical School. How should Nancy and the Foundation respond to UAB Medical School Foundation s request for funding in light of the Foundation s prior giving? Does Elaine s pending application to UAB Medical School impact how the Foundation, or Nancy, should handle the situation? 4

5 Hypothetical: Boards and Volunteering 1. You have been invited to join the board of an organization that is currently a foundation grantee. a. What are the external reputational issues with accepting it? b. What are the internal reputational issues with accepting it? c. What are the legal issues with accepting the invitation? 2. Does the analysis change depending on your position with the foundation: a) What if you are the program officer (PO)? b) What if the PO reports to you? c) What if you and the PO work in the same program area without a supervisory relationship? d) What if you are in administration and have no program responsibilities whatsoever? 3. What if the organization is not a current grantee but competes with or operates in the same program space as foundation grantees? 4. What if it is not you that is invited to join the board but it is a member of your immediate family? Or a very close personal friend? 5. Does the analysis change if it is not the fiduciary, governing board but it is an advisory position? Or you are volunteering as a docent, tutor, big, etc.? 5

6 Hypothetical: Participating in Grantee Programs 1. Your child wants to participate in a grantee program sponsored by the foundation, such as the FIRST robotics or Lego league program. There are no eligibility requirements for participation other than being enrolled in a given school. There are winners based on direct competition among teams and winners advance to the next levels of competition locally, regionally, and nationally. a) Can she participate? b) Can you serve as an advisor for your child's team? c) What else would you want to know to inform your judgment? 2. Your child wants to participate in a grantee program sponsored by the foundation, such as a business plan competition during which judges will make subjective assessments of quality and merit. a) Can she participate? b) Can you serve as an advisor to the team submitting an entry? c) What else would you want to know to inform your judgment? 6

7 Hypothetical: Reporting 1. A colleague has mentioned to you in passing that he is helping a friend start a new 501(c)(3) non-profit. A few months later, you realize the foundation has awarded a $75,000 grant to this organization. Your colleague is not the program officer;; however, he has signing authority on this grant. a) Is this a conflict of interest (COI)? Why or why not? b) What actions, if any, should you take, and why? i. Do nothing. ii. Discuss your concern about the COI with the colleague who helped get the new entity off the ground. iii. Discuss the situation with other members of your team to get their view of whether or not this is a COI. iv. Report your concerns about a COI to your supervisor. v. Bypass your supervisor and go straight to a lawyer on the Foundation s legal team. vi. Go straight to the Board of Trustees with your concern. vii. Contact Ethics Point because you want anonymity. viii. Other? c) What else would you want to know to inform your judgment? 2. You are attending a conference with two colleagues from the foundation. After a long day of sessions, you attend an evening reception sponsored by the conference. You notice that one of your colleagues is on her fourth martini. When you approach her, you realize she is speaking to others about the foundation s work in an overly critical, offensive manner. You try to steer the conversation in another direction, with no success. a) What should you do then, if anything? b) What should you do later, if anything? c) Why? d) What else would you want to know to inform your judgment? 7

8 Sample Foundation Codes of Conduct/Ethics