Report Looks at Factors That Affect Grant Makers’ Expenses

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What Drives Foundation Expenses & Compensation?: Results of a Three-Year Study, by Elizabeth T. Boris, Loren Renz, Mark A. Hager, Rachel Elias, and Mahesh Somashekhar, examines what the 10,000 largest U.S. grant makers spent on administrative expenses from 2001 to 2003. Among the key findings: Only 29 percent of the groups have paid employees. Most philanthropies do not pay board members, though independent foundations with paid employees are more likely to compensate board members. Also, the size of the foundation, number of paid employees, and staff-intensive programs — like international grant making and direct charitable activities — all increase costs. The study, a collaboration between the Urban Institute, the Foundation Center, and GuideStar, looks separately at independent, corporate, and community foundations, and reports that it is important “to consider a foundation’s type and size, mission and goals, and patterns of operation in assessing its administrative expense and compensation levels.” Tables describing average board compensation, charitable administrative expenses, executive compensation, and other information are included.

Publisher: Urban Institute, 2100 M Street, N.W., Washington, D.C. 20037; (202) 261-5790; fax (202) 833-6231; http://www.urbaninstitute.org; 88 pages; available free for download on the organization’s Web site.