Nearly Half of Family Foundation Boards Seat No Outside Trustee

Foundation boards attract research attention because the board is the point where a donor's money stops being private property and becomes a charitable trust held for someone else's benefit, which means the people seated at that table are the people who interpret what the obligation requires. Two publications released this year approach that question by different routes, one assembling what a decade of research has established about how nonprofit boards are governed, and the other counting the seats on a particular set of foundation boards and reporting who occupies them.

The research synthesis arrived first, and it exists to establish what is already known before anyone recommends a practice. In January 2026, Nonprofit and Voluntary Sector Quarterly published a systematic review of corporate governance in nonprofit organizations, meaning a study that gathers and summarizes existing published research on a question rather than collecting new data of its own. The review synthesized 55 peer-reviewed studies published between 2015 and 2025, so its account describes a decade of scholarship rather than a single season of it.

Theory matters in this literature because the theory a researcher starts from decides which people are treated as having a stake in the decision. The review reports that agency theory remains influential, which is the framework that treats managers as agents hired to act for owners and asks how the owners keep them honest, while recent research increasingly draws on governance, stakeholder, resource dependence and legitimacy theories. Those alternatives widen the circle of people a board is answerable to, because governance theory looks at the rules and structures that distribute control inside an organization, stakeholder theory asks which parties are affected by a decision, resource dependence theory examines how an organization's need for money and support shapes who it listens to, and legitimacy theory concerns how an organization maintains the standing that lets it keep operating.

On what the assembled evidence emphasizes, the review reports that findings highlight the importance of board diversity, strategic leadership, ethical practices and stakeholder alignment. It also names the limits of its own base, reporting that quantitative studies dominate the field while qualitative and mixed-methods designs are gaining visibility, and that the literature remains geographically skewed with limited insights from the Global South, a term for lower-income and formerly colonized regions outside North America and Europe. Those limits are worth carrying forward, because a standard assembled largely from one set of countries is being applied to organizations in many others.

The second publication sets out to measure rather than to synthesize, and its value comes from the narrowness of what it covers. Exponent Philanthropy, a membership association whose members include foundations that operate with few or no staff along with philanthropic families and individual donors, publishes an annual benchmark of that field, and its 2026 Foundation Operations and Management Report draws on the 332 members who completed the 2025 survey along with 35 similar foundations that are not members. That scope is the reading instruction for every figure that follows, because the respondents are small-staffed foundations connected to one association rather than a sample drawn to represent all American foundations.

Within that group, the report counts who sits on family foundation boards. It states that nearly half, 46 percent, of family foundations reported boards composed entirely of family members, while 54 percent included at least one nonfamily trustee, a trustee being a person who holds legal responsibility for how the foundation's assets are used. The report adds that even when boards extend beyond the family, influence remains concentrated, because on average 79 percent of board seats are held by family members.

The report also tracks how these boards plan to continue, because a family foundation's governance question extends past the current generation. It finds that nearly three-fourths, 71 percent, of family foundations reported actively involving next-generation family members in their work, and it describes the form that involvement usually takes, with 60 percent serving as board members and 25 percent holding board leadership positions. Those figures describe a succession practice that is already underway rather than one being contemplated, which means the composition the survey measured is likely to persist as the current trustees hand responsibility down.

Setting the two documents beside one another produces a tension rather than a verdict. The review reports that the research emphasizes board diversity and stakeholder alignment among the dimensions that the literature treats as consequential, and the survey reports boards on which a single family holds most or all of the seats. Neither document evaluates the other, and the survey measures composition rather than conduct, so nothing here establishes that these boards govern poorly. What the pairing does establish is that boards on which family members hold most of the seats sit at a distance from the dimensions the assembled research attends to, and that distance has not been measured directly by either publication.

Nonprofit and foundation professionals gain a more accurate picture of where a funding decision is actually made at a small foundation. When a board carries no nonfamily trustee and the foundation runs with little or no staff, a case for support is less likely to pass through a program officer or a review committee on its way to a decision, which means cultivation aimed at staff may be aimed at a layer that does not hold the authority to say yes.

Digital and crypto-native giving leaders should read the comparison as one about records rather than about virtue. Where a governance process runs on-chain, the votes and the token holdings behind them are written to a public ledger, so concentration in those systems can be examined by anyone at any time. Concentration on a family foundation board became visible here because a membership association ran a survey and asked, which means the difference between the two structures lies partly in how continuously each one can be observed from outside.

Donors and family-office advisors now have a documented benchmark to set a client's governance plan against. An advisor who recommends adding an independent trustee has usually argued it on principle, and these figures let the same conversation reference what comparable foundations report doing, including the 71 percent who are already involving the next generation and the formal roles the report says that involvement usually takes.

Corporate giving and CSR leaders have a reason to examine what their own giving vehicle borrowed. The review's account of theory describes frameworks that originated in the study of corporations and were carried into nonprofit research, and a corporate foundation performs a similar transfer whenever it applies the parent company's board practice to a charitable entity with a different legal obligation. Knowing which framework a practice came from helps clarify whether it still fits the entity now using it.

NGOs and international organizations have the most direct interest in the limit the review names. If the governance literature remains geographically skewed with limited insights from the Global South, then governance standards written into partnership agreements and applied to local partners rest on an evidence base assembled largely elsewhere, so an organization asking a partner to meet a board-composition requirement should be able to say what that requirement is grounded in.

"When every trustee shares a surname, an objection has to travel through the family before it reaches the governance table, and that is a longer route than a board minute usually records."

EILEEN HERNANDEZ, THE STRATEGIC STEWARD

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The second pillar of the DIA Protocol concerns the authority layer, where it names the iron-law tension that appears whenever a structure built to distribute a decision keeps concentrating it in the same small group. These two publications give that pillar a more specific footing, because a benchmark that counts board seats at small foundations reports the tension in the setting where this brand's readers actually sit, and a review that maps what the research attends to shows which dimensions that setting is being measured against. Neither one settles whether a given board has concentrated its authority, so the work a trustee can do with them is narrower and more useful than a verdict, which is to check a real composition against a documented range and see where the board falls.