Organizational Purpose and the Governance of Philanthropic Foundations

Organizations increasingly adopt purpose that goes beyond shareholder-wealth maximization and addresses a broader common good. At the same time there is
growing recognition that purpose can mean different things to different actors. Existing research stresses the importance of governance to effectively deploy
purpose. However, our understanding of how organizations accomplish this is limited. We study purpose in philanthropic foundations – a prominent, yet hard-to-
access type of purpose-driven organizations –, applying a non-normative, meta-contractual perspective to organizational governance. We conducted a multiple
case study drawing on interviews, archival documentation, and workshops from 6 European philanthropic foundations. We show how core dimensions of meta-
contractual governance – deliberation, speech acts and functional actions –, shape decision makers’ perceptions of purpose. Our primary contribution is to the
literature of organizational purpose, by showing how governance practices facilitate or impede good governance from a value-neutral perspective.