Foundation Expenses Tied to Operating Style, Study Finds
Foundation Expenses Tied to Operating Style, Study Finds
A new study of the expense and compensation patterns of the nation's 10,000 largest grantmaking foundations issued by the Urban Institute, the
Foundation Center
and GuideStar has found that 28 percent of these grantmakers reported no administrative expenses related to their charitable activities.
While expense and compensation patterns among foundations that reported expenses and paid trustees or staff vary widely, the report, Foundation Expenses and Compensation: Interim Report 2005, found that differences in foundations' operating styles had considerable impact on expense and compensation levels. Employing paid staff, for example, significantly affects a foundation's operating costs, and international giving is more expensive than local or national giving. The findings suggest that, along with size, a foundation's mission and programmatic objectives are important factors to consider when analyzing its administrative expenditures.
The study looked at the 10,000 largest independent, corporate, and community foundations by giving in fiscal year 2001. Among its key findings, the report revealed that administrative expenses represented 7 percent of the $21.2 billion in qualifying distributions made by independent foundations, while grants accounted for 90 percent; expense ratios ranged from less than 5 percent of qualifying distributions for a majority of unstaffed foundations to more than 50 percent for a handful of staffed foundations; the largest foundations tended to compensate at the highest levels, although the median ratio of their compensation to giving ranked among the lowest; and the median compensation of the 1,009 paid top executives was $100,209. A final version of the report analyzing additional operating characteristics such as staff size and the number and size of grants will be published later this year.
To read or download the interim report (20 pages, PDF), visit:
http://fdncenter.org/research/trends_analysis/pdf/foundation_5p.pdf
“Foundation Expenses Tied to Operating Style.”
Foundation Center Press Release
7/18/05.
Primary Subject: Philanthropy and Voluntarism
Location(s): National
FC007922
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