The Center for Effective Philanthropy’s research on “Foundation Governance Today” could not be more timely. Foundation leadership and governance are operating in a challenging, disruptive environment. It is not only the funding landscape that is dramatically shifting, thrown into turmoil by unprecedented public budget and foreign aid cuts and, as a result, massively rising needs across communities, but also the uncertain, unpredictable political, social, and economic context.
Given this, it is no surprise that 87% of foundation CEOs interviewed by CEP reported that leading an organization in such times has become more challenging than in the past. “Unpredictable operating environment,” “uncertainty,” “fear and anxiety,” and rising levels of “stress” are among the factors commonly referred to.
The report provides essential clues to leaders on how to navigate this time of uncertainty. Those clues include:
- First, governance is central to unlocking philanthropy’s potential to navigate times of uncertainty and a shifting funding landscape. It is no longer only compliance, but the ability to adapt quickly and make choices that enable impactful governance. The foundation board is a key lever in steering the strategic direction of the organization, managing its investments and making the funding allocation decisions.
- Second, the question of to what degree board members are embedded in the reality of the communities a grantmaker serves — their everyday challenges and needs — determines how board members relate to the existential threats to civil society and freedoms, the urgency of the moment and, thus, their willingness to take risks and change course, if needed.
- Third, internal alignment and high levels of trust between foundation leadership and governance appear to be major currencies in navigating this uncertain terrain and moving forward.
This resonates with the preliminary data Philea has collected among philanthropic organizations in Europe and beyond — among them CEOs, board members, and staff — in 2025, which is not yet published. Over 95% of the respondents surveyed reported that trust and alignment between the board and leadership are critical in determining good governance in the coming decade, ranked as “extremely important” or “very important.” Other enabling factors mentioned are “long-term thinking” and “governance focusing on strategy, not just scrutiny.”
The central question that the findings of the CEP report get at is how to better manage and respond to crises and how foundation boards and leadership can better allocate resources, through increased payout or risk-taking. Implicit in the interview results is the idea that sufficient resources can be mobilized to address the challenges faced by civil society and mitigate public funding cuts. One leader quoted in the report illustrates this, recommending their board “shift the center of gravity of opinion away from perpetuity/preservation of capital and toward utilizing our resources to respond to crises”.
While increased payout might provide short-term relief and a soft cushion in a moment of hardship, it will most likely not be enough to close the gaps and enable the larger, transformative shifts that are required. Risk-taking allows one not only to focus on preventing threats but also to act on opportunities. Hence, this question needs to be expanded and explored in a broader context. What are the underlying causes of the current crises? What are their long-term impacts? What are the potential threats, and what are the opportunities? What strategic choices does philanthropy need to make now?
Long-term thinking might sound like an oxymoron, given that civil society is facing existential threats, the rule of law is under attack, and the very license of philanthropy to operate is being undermined. Yet not addressing the underlying root causes of the crises faced today, such as societal polarization, the concentration of wealth, an aging population, the rise of violent conflict and war, will come at a high cost. Non-action might be even more costly.
In this context, the conversation about the role of boards and who serves on boards becomes even more strategic and essential. Governance plays a critical role: how foundations make decisions, set priorities, and balance risks directly shapes philanthropy’s ability to serve the common good. Governance needs to ensure the organization’s capacity to respond not only to the current crises but also future challenges and long-term transformation. Hence, boards’ ability to take risks and adapt to evolving contexts and needs is key. The question, thus, becomes how to shift the mindset from managing crises to building governance capacity for collective decision-making and long-term change, without depleting finite resources and compromising the ability of future generations to make their own strategic decisions and choices.
In today’s times of cascading risks and uncertainty, the role of governance in philanthropy is shifting from compliance to stewardship. As Rien van Gendt, a governance expert and long-serving board member of philanthropic organizations, convincingly writes in “Philanthropy Back to the Drawing Board,” “Foundations themselves, and by extension their philanthropy associations, should also realize that compliance is not identical to good governance.”
The urgency of the moment is clear. The risks and threats that leaders face today are real, but so is the need to create new narratives and pathways to positive, hopeful futures. Philanthropy cannot stand on the sidelines. There is a need for bold, courageous, long-term-oriented philanthropy that not only spends down, but mobilizes more people and capital for the common good.
As Noorain Khan, Ford Foundation’s chief innovation officer, has observed: “The social sector stands at a critical inflection point that demands completely reimagined tools, strategies, and ways of working.”
Governance is a key leverage point to do exactly that.
Hanna Stähle is head of foresight and innovation at Philea – Philanthropy Europe Association.
