Exploring, Examining, and Explaining How Participatory Governance Adds Value to Saudi Foundations’ Philanthropic Strategy

Foundations’ flexibility, given their independence from fundraising imperatives, competition forces, and accountability pressures, enables them to invest in long-term, high-risk, multi-level experiments to deal with the increasingly complex societal problems. This flexibility, coupled with the growing role philanthropy plays in promoting social welfare across the world, is arguably what makes studies that focus on foundations’ philanthropic approaches of utmost importance. There is a mounting interest among scholars in the governance of foundations, the systems and processes concerned with ensuring the overall strategic direction of organizations. Influenced by agency and stewardship theories, an increasing number of studies address such topics as boards’ internal control, e.g. CEO oversight, and collaborative, e.g. resource development, practices. One topic that has received little attention, both in academia and in a plethora of best practice toolkits, is stakeholders’ participation. Beyond board compositional representation, relatively little research has been conducted about the democratic and collective intelligence approaches of decision making that can create more sustainable social transformations. This study employed a three-phase, mixed-methods research design to study the role of participatory governance in shaping Saudi foundations’ philanthropic strategy. The study started with an initial exploratory investigation of strategy formulation processes among seven diverse foundations. Based on the literature review and exploratory phase findings, a dataset on 54 foundations was developed to statistically examine the relationships between governance practices and philanthropic strategy. A seven-months case study was then conducted to explore potential factors that may explain how participatory practices may influence strategies. Results suggest a significant relationship between participatory governance and philanthropic strategy. Comprehensive, deep and systematic stakeholders’ participation practices are positively associated with more evolved, high risk, multi-level, and resourceful philanthropic approaches. Additionally, while control and stewardship governance practices showed a negative association with philanthropic strategy, their implementation in high levels marginally improve the positive impact of participatory governance on strategy development. Explanatory factors included exposure to broader issues/factors, revelation of alternative solutions, reinforcing trust and commitment, and key players’ identification and engagement. Results may be used to inform the development of participatory forms of leadership, even among society’s most unconstrained organizations