Ethics Guidelines Proposed for Small Funds, Companies

An association of foundations has issued new ethical guidelines for family and corporate charitable funds.

The “stewardship principles” — created by the Council on Foundations, a Washington group with more than 2,000 members, about half of which are family or corporate grant makers — include nine goals that cover topics from establishing a board to ensuring adequate communication with the public. The principles are almost the same for both types of foundation, except for two for family funds that cover donor intent and succession issues, and two for corporate grant makers that deal with connecting a company’s philanthropy with its business goals and its employees.

The principles were developed after the council conducted seven meetings across the nation with foundations to solicit suggestions about what to include. The guidelines were drawn up in response to repeated requests from members for such information, said Karen Green, managing director of the association’s services for family foundations. In addition, intensified scrutiny by Congress and federal and state regulators increased the urgency for such a list of standards, she said, although “the content is not a direct reaction to the scrutiny.”

For each of the principles, the council included several ways the organizations could achieve the stated goal. For example, under the goal of communicating with the public, the council suggests that a foundation publish online or in print its board of directors, mission, and other information.

The guidelines were sent to family foundations and corporate grant makers last month.

While Ms. Green said the reaction from members had been positive so far, at least one nonprofit official questioned how helpful the principles really are.

“Over all, the COF principles represent useful starting points for thinking about philanthropic accountability,” said Rick Cohen, executive director of the National Committee for Responsive Philanthropy, a foundation watchdog group in Washington. But “there is little that would make any but relatively clueless foundations trip over these basic standards.”

Ellen Dadisman, vice president of government relations at the council, said the principles were intentionally written broadly to apply to as many funds as possible.

Copies of the guidelines are available free online. “Stewardship Principles for Family Foundations” is available at http://www.cof.org/Content/General/Display.cfm?contentID=2045, and “Stewardship Principles for Corporate Foundations” is available at http://www.cof.org/index.cfm?containerid=264.