Report Shows Hiring Slows at Foundations

The percentage of foundations that employ paid staff members has decreased over the past decade,

even as the number of foundations that hire workers has increased, according to a report published last month by the Foundation Center, in New York.

Most grant makers, especially small or family foundations, are run by volunteers. Those that do employ workers, however, are hiring at a slower rate than in previous years due to the sluggish economy, the report says.

The report, which includes data from 20,002 foundations that distribute at least $100,000 annually or hold assets of $1-million or more, is based on the Foundation Center’s annual surveys of the nation’s largest grant makers.

The share of those foundations reporting paid staff members was 16.1 percent this year, compared with 16.5 percent in 2001 — a 6.6-percent drop since 1992.

Nevertheless, a steadily increasing number of foundations have hired professional staff members over the past 10 years.

In this year’s survey, 3,228 grant makers reported that they employ paid workers, compared with 2,039 reporting the same a decade ago. A majority of grant makers in the survey that paid employees — 58.3 percent — said that they had added more paid workers since 1992. The current survey found 17,515 paid foundation jobs overall.

However, grant makers said the number of staff members rose by only 3 percent in the past year — a much slower growth rate than in 2001, when foundations increased the size of their staffs by 10 percent.

Staffing Growth Expected

A large number of foundations have been created in the past 10 years, according to the report. Since 1992, the number of grant makers included in the center’s annual survey has increased by 123 percent. Since most fledgling foundations have limited resources, the majority of them cannot afford a large staff — which accounts for the drop in the percentage of grant makers that hire workers. The report concludes, however, that in the future these newly created foundations are likely to seek paid employees to help them manage and develop their programs. As a result, the report says, foundation employment could increase to the percentages seen in the early 1990s.

Of those grant makers that do employ workers, the overwhelming majority — three out of five — report that they have no more than two paid staff members. Less than 1 percent of all staffed foundations in the survey said that they employ at least 50 people.

Not surprisingly, the wealthiest foundations offered the majority of career opportunities in the grant-making field.

Approximately three-quarters of foundations with at least $100-million in assets said they had paid employees. These largest foundations are responsible for 57.1 percent of all the grant-making jobs included in the survey.

Among the report’s other findings:

• Older foundations hired more staff members than younger grant makers. Foundations established before 1950 account for 7 percent of all grant makers included in this report, but provide 30.9 percent of the total grant-making jobs. In contrast, foundations established after 1979 make up 63.4 percent of surveyed foundations, but supply only 23.8 percent of the total staff positions.
• Staffing trends vary by geographic region. Western grant makers were most likely to have paid workers, with nearly one out of five reporting that they have employees. In the past 20 years, the report states, many large foundations were established in the West, and as they grew, they tended to hire more employees to oversee their expanding workload than did their counterparts in other regions.
• Community foundations had a higher share of professionals on their staffs than any other type of grant maker. Those foundations employ a variety of professionals because they not only manage grants, but also conduct their own fund-raising activities.

A summary of “Foundation Staffing: Update on Staffing Trends of Private and Community Foundations” is available on the Foundation Center’s Web site at: http://fdncenter.org/research/trends_analysis/index.html.

The full report is one of five included in the Foundation Today Series, published by the Foundation Center. These reports can be ordered through annual subscriptions for $95. Orders should be sent to Foundation Center, Department NA11, 79 Fifth Avenue, New York, N.Y. 10003-3076; (800) 424-9836; fax (212) 807-3691. Online orders can be placed via the center’s Web site.