Self-discipline and Accountability of Foundations

Speaker: Thomas McCaillie, Executive Director & President of Maclellan Foundation

    Who should supervise foundation? Mr. Thomas H. McCallie's speech on "Self-disciplin and Accountability of Foundation'' may enlighten us on that issue. The speech was given on June 19 at the speech conference co-sponsored by China NPO Network and Century Forum for Chinese Enterpreneurs.
Mr. McCallie was born in Ft. Oglethorpe, the US in1942. Being a doctor of law, he used to be an attorney through 1969 to 1989. He joined the Maclellan Foundation in 1989 and is now the executive director and the president of the Foundation.
The Maclellan family was engaged in life insurance and accident insurance in their early stage. They are devout Christians, adhering to the idea that business should be done honestly. Based on Christian principles, they founded the Maclellan Foundation in 1952. The Foundation is currently supporting more than 200 NPOs and charities with over $20, 000, 000.
As a special guest of this conference, Mr. Yan Mingfu, the honorary president of China Charity Federation spoke first. He pointed out that along with China's entry into the WTO, Chinese NPOs and foundations would be developing more rapidly. As a result, more and more income-taxes will go into the projects of NPOs and foundations in China. The NPOs', financial management and supervision will therefore be urgently putting on our agenda, which will strongly influence Chinese NPOs' operating capacity, prestige and future.
Mr. McCallie then introduced how the foundations in the US were put under supervision.
Firstly, the foundations' accounts should undergo examination and review by auditing agencies at government level. The state government takes charge of approving and reviewing the foundations' by-laws and operating activities. The foundations' accounts should be disclosed to both the government and the public. If the foundation has a yearly income of over $25, 000, 000, it must submit a financial statement to the federal government, including a detailed statement of the foundation's operating activities and an income and expenditure account.
Secondly, each foundation in the US has its own by-laws that the foundation should comply with as basic rules. The regulations usually focus on three aspects:
1. The foundation must fit its actions to its words, namely, the actual purpose of the foundation should be consistent with what it stated in its by-laws.
2. The foundation should regularly evaluate its work so as to improve its ability to adapt to
the changing society.
3. The foundation should assess its operating projects every year, giving considerations to
both its purposes and principle relating efficiency and cost.
Thirdly, as an important mean of internal supervision, each foundation in America is required to have a board of director. The majority of the board should be outsider members without receiving any payment form the foundation. In addition, the board should formulate some rules and polices to normalize its operations. The board is responsible for the approval and review of the foundation's annual plan and financial statement as well as all its financial affairs. The board should also employ an executive president and set up a fund for him/her, monitoring his/her work.
Finally, the board is supposed to keep its power of decision-making and try to avoid being controlled by others.
This speech conference drew great attention from both NPOs and enterprises. It has built up a new platform for communications between NPOs in China. China NPO Network is pursuing further cooperation with the Maclellan Foundation.