Community foundations see growth in assets, gifts, grants

Assets of community foundations in the U.S., as well as gifts to them and grants from them, all grew in 2013 compared to 2012, a new report says.

Assets grew at nearly all the 285 community foundations surveyed, and 90 percent of those foundations now manage assets that exceed levels in 2007 before the economy collapsed, says Guideposts for  Growth and Aspirations, a report from the Council on Foundations and CF Insights.

It says donor advised funds continue to drive growth and grantmaking for community foundations, representing roughly 40 percent, on average, of total gifts they receive and grants they make.

Administrative fees continue to represent the most significant revenue source for community foundations, the report says, and operating budgets to continue to grow as community foundations invest more in staff and leadership.

Assets, gifts, grants

Total assets of community foundations grew to $66 billion in 2013, up from $58 billion in 2012.

Total gifts to community foundations grew to $7.5 billion from $6.9 billion, while while total grants they made grew to $4.9 billion from $4.5 billion.

Assets grew 15 percent for community foundations, regardless of the size of their total assets.

While big gifts can have a big impact on the average change in assets for community  foundations, the report says, overall there was no change in average gifts between 2012 and 2013.

However, assets grew 12 percent for foundations with more than $250 million in assets, while they fell 7 percent for foundations with $50 million to $249 million in assets, and grew less than 1 percent for foundations with less than $49 million in assets.

Grantmaking

Grants from community foundations grew 11 percent for those with assets of more than $250 million, 13 percent for those with assets from $50 million to $249 million, and 9 percent for those with assets of less than $49 million.

Grants grew for nearly half of community foundations surveyed, and fell for roughly one-fourth.

Compared to assets and gifts to community foundations, grants tend to be steadier from year to year because of the impact of spending policies applied to endowed assets, the report says, , although the prevalence of non-endowed donor advised funds under management also can have an impact.

Donor advised funds

Community foundations surveyed hold more donor advised fund assets than Fidelity Charitable, Schwab Charitable and Vanguard Charitable — the three largest national providers of donor advised funds, the report says.

Community foundations held $20.3 billion in donor advised funds in 2013, up from $16.3 billion in 2012, compared to $18.78 billion in 2013 held by the three national donor advised funds, up from $13.6 billion in 2012.

While national donor advised funds received $6.6 billion in gifts in 2013, compared to $4.3 billion in gifts to the donor advised funds at community foundations, total grants from the two groups were similar — $2.9 billion from the national donor advised funds, compared to $2.6 billion from donor advised funds at community foundations.

Administrative fees

Administrative fees still provide the most significant revenue source for community foundations, regardless of asset size, the report says.

Still, it says, larger community foundations, or those with assets of more than $250 million, depend more heavily on revenue from administrative fees than do smaller community foundation, which count on other revenue streams like fundraising and disbursements from operating endowment and reserves.

Administrative fees represented 75 percent of $5.9 million in average total revenue at community foundations with over $250 million in assets, 73 percent of average total revenue of $1.5 million at community foundations with $50 million to $249 million in assets, and 61 percent of average total revenue of $447,000 at community foundations with up to $49 million in assets.

Operating  capacity

Over three-fourths of community foundations surveyed invested more in their operating expenses in 2013 than in the previous year.

And operating budgets that grew at community foundations operating budget increased 17 percent on average.

The share of community foundations that increased their operating budget grew to 77 percent in fiscal 2013 from 72 percent in fiscal 2012 and 2011, 48 percent in fiscal 2010, and 54 percent in fiscal 2009.

Spending on staff

Costs associated with staff salaries and benefits represented roughly two-thirds of total  community foundation expenses in fiscal 2013, on average, regardless of asset size.

Average staff size, and staff costs as a share of total costs, were 39 and 64 percent, respectively, at community foundations with over $250 million in assets, 12 and 62 percent at community foundations with $50 million to $249 million in assets, and 4 and 61 percent at community foundations with less than $49 million in assets.

Todd Cohen

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