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The Challenges of Foundation Stewardship: When a Philanthropic Gift Becomes a Burden

Journal of Applied Case Research, V 13 (1), 32-52, 2015

21 Pages Posted: 30 Mar 2016 Last revised: 21 Sep 2016

Ruth Sessler Bernstein

University of Washington, Tacoma

Fabio Ambrosio

Central Washington University

Lise Anne Slatten

University of Louisiana at Lafayette

Date Written: December 1, 2015

Abstract

The Challenges of Foundation Stewardship is a decision-based case. The case examines a private foundation established with the ideal that giving is ‘fun.’ However, with a divided board of directors composed of members from two splenetic families, there were many disagreements and the ‘fun’ was long gone.

The case delves into the challenges of governing a private foundation without a mission statement, a grant (spending) policy, or clear donor guidance. In the case study, the lack of clear operational guidance enabled individual board members, without any discussion or approval at the board level, to award grants. The board members, despite an attempt to keep the foundation operational, resolved to dissolve the foundation because it was no longer feasible to govern with a divided board. However, dissolving the foundation proved to be complex, time-consuming, and costly in part due to associated legal and tax issues. The case illustrates the importance of donor intent, mission statements, giving policies, and shared versus individual board member roles and responsibilities. Students will be presented with an overview of the legal and tax ramifications of each dissolution option. At the conclusion of the case, the students will decide which option is best for the foundation and will justify their decision.

This case illustrates what constitutes good governance in nonprofit organizations by stressing the importance of a clear mission and spending policy. The students will learn how to avoid the pitfalls that led to The Gift Fund’s dissolution.

Suggested Citation

Bernstein, Ruth Sessler and Ambrosio, Fabio and Slatten, Lise Anne, The Challenges of Foundation Stewardship: When a Philanthropic Gift Becomes a Burden (December 1, 2015). Journal of Applied Case Research, V 13 (1), 32-52, 2015. Available at SSRN: https://ssrn.com/abstract=2756334

Ruth Sessler Bernstein (Contact Author)

University of Washington, Tacoma ( email )

1900 Commerce Street
Tacoma, WA 98402-3100
United States

Fabio Ambrosio

Central Washington University ( email )

400 E. University Way
Ellensburg, WA 98926
United States
(206) 439-3800, ext. 3833 (Phone)

HOME PAGE: http://www.cwu.edu/business/

Lise Anne Slatten

University of Louisiana at Lafayette ( email )

Lafayette, LA 70504
United States

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