Saturday, April 29, 2006

Governance changes at AAEA Foundation

The AAEA Foundation, a non-profit foundation associated with the American Agricultural Economics Association, will see major changes in governance following a vote of the association membership this month.

In the past, the association was governed by an Executive Board (note: official name corrected 05/03/2006), while the foundation was governed by a Foundation Board. Under the new structure, the Foundation Board will end its work, and responsibility will be taken over by a committee that answers to the association's Executive Board.

Before the vote, proponents noted that the change will improve coordination between the foundation and the association.
The motivation for this proposed change is three-fold: (1) The administrative and operating expenses for travel and other support of Foundation Board members currently take between one-tenth and one-sixth of total Foundation funds ($60,000-$72,000) available for expenditure in any given year, an amount we believe is an unacceptable drain from achievement of the Foundation’s goals; (2) The Foundation Board’s semi-annual meeting process, a necessity for a large Board requiring a quorum for decision making, curbs flexibility and prevents timely action on intermittent opportunities; and (3) Because the bulk of Executive Board and Foundation Board decision making, and the AAEA Business Office support of the two boards, are concentrated at the same two meeting times of the year, Board-to-Board communication has not been highly interactive. Since many Foundation programs can complement on-going activities of the Association, such as those that support special programs or travel grants for the annual meetings, coordination with the Executive Board is important.
Opponents of the change expressed concern that the foundation would lose its independence from the professional association.
So the AAEA Board proposal to takeover the Foundation is a bad idea. The loss of the firewall, which would allow the mixing of Foundation activities with day to day membership services, is a no-no in the foundation world. It is not clear what the coordination problem is, so we don’t know if this is anything more than AAEA Board imperialism. And the cost saving may not be much because the Foundation Committee is going have to perform the same functions as the Foundation Board.
The association and the foundation are both tax-exempt non-profit organizations. The foundation will continue to fund "projects to support professional excellence in teaching, economic education, research and communication."