Virginia Esposito, the
executive director of the National Center for Family Philanthropy, recommends
that foundations in which a CEO sits on the board should set up a separate
compensation committee, so that no one votes on his or her own raise. “It should
not be a job for someone who cannot find a job somewhere else,” Esposito says.
“But if a member of the board is also qualified to be a paid staff person, I
think that is a terrific staff person to have.”The Council on Foundations
discourages calculating trustee fees as a percentage of the endowment on the
grounds that it would prompt risky investment strategies. But exactly what
constitutes a reasonable trustee fee is less clear. The Council on Foundations
survey, as unscientific as it was, found the mean trustee compensation to be
$12,600. That number, adjusted for inflation, is more than a third higher than
it was 15 years ago. In any case, outrageous payouts may attract unwanted
attention and damage trustees’ reputations. It is infinitely easier to undertake
site visits and award grants if people view trustees as out to help others,
rather than to enrich themselves. When it comes to determining how much is
enough, trustees will need to recall that when the trust was set up by the
founders, it was with the intention of using it for noble purposes. Giving away
money might indeed be hard work, but it remains a privilege to hold the
job. Illustration by Michael Gibbs
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