NCRP Report: Foundations Hit by Madoff scheme Lacked Adequate Board Size and Diversity

A new report released by the National Committee for Responsive Philanthropy (NCRP) reveals that the majority of the foundations hit hardest by Bernard Madoff's ponzi scheme lacked two things in common: (1) adequate board size, and (2) board diversity.

The report's key findings indicate that:

1. One hundred five (71 percent) of the close to 150 foundations [studied] lost between 30 and 100 percent of their assets due to investments with Madoff.
2. The median board size among these 105 foundations was three, with a range of 0-7 total trustees.
3. A mere 16 (15 percent) of these 105 foundations had boards comprising five or more individuals ... 38 foundations listed only one or two trustees, and 46 foundations listed three of four trustees.
4. Of the 16 foundations with five or more trustees, an analysis of trustee names shows notable homogeneity.

The NCRP recommends that foundations have at least five board members and that these board members have a diverse background. The committee also encourages foundations to have a conflict-of-interest policy and a code of conduct, and to make public demographic information about the board.

VEJ