Boards, governance and value creation in grant-giving foundations

The non-profit sector is a sizeable and highly dynamic component of economies and societies throughout the world. The expectations placed upon non-profit organizations raise fundamental issues such as the capacity of these organizations to deliver, their accountability to the various constituencies that they serve and their capacity to create value. The effectiveness of these organizations should not be taken for granted, and it is therefore important to understand which factors affect their ability to create value. This paper investigates the relationships between the specific knowledge and experience possessed by board members and foundations’ commitment to pursue high value-added activities, such as the improvement of the performance of grant recipients or social innovation. It uses an empirical analysis to apply statistical techniques to a sample of Italian banking foundations. Our results show that, of the various types of skills and background possessed by board members, the managerial skills of business experts are particularly relevant for value creation by grant-giving foundations. The article therefore contributes to the discussion on the relationship between board skills and organizational outcomes.