Operations

Staff and financial resources are important to monitor for smaller foundations who are looking to grow, and for larger foundations who are looking for the flexibility to diversify their offerings.

Revenue mix

Administrative fees assessed on funds are the primary source of revenue for community foundations and will be for the foreseeable future, though differences in revenue mix are observed in different asset size cohorts. Smaller community foundations, on average, depend more on direct fundraising to support operations and internal operating endowment/reserve distributions than larger foundations. Some diversification can be observed at individual community foundations seeking alternative means of funding, which in turn support emerging efforts such as community leadership and special initiatives.

Averages were used to total 100%. (n=255)

Asset size range

Size of foundation	Administrative fees	Fees for service	Fundraising: operations	Fundraising: programmatic	Distribution from endowment/reserve	Other revenue
$0-$25M	63%	1%	15%	5%	11%	4%
$25-$50M	68%	0%	11%	5%	10%	6%
$50-$100M	70%	1%	10%	5%	10%	4%
$100-$250M	78%	1%	6%	3%	8%	4%
$250-$500M	78%	1%	4%	6%	4%	6%
$500M+	73%	3%	4%	6%	5%	8%
All	71%	1%	9%	5%	8%	5%

Operational expenses

Surplus vs. subsidy

Fewer respondents reported expenses that were in excess of revenues earned (14%) than FY 2016 (22%), while just under half of all respondents reported surpluses. Gaps between revenues and expenses are typically covered by unrestricted funds, though this has an effect on the flexibility of a community foundation’s business model, including their ability to invest in foundation-operated initiatives and leadership.

Calculated as revenues divided by expenses: Significant surplus >125%; Modest surplus = 105%-124%; Breakeven = 95%-104%; Modest subsidy = 75%-94%; Significant subsidy <75% (n=256)

Significant subsidy	Modest subsidy	Breakeven	Modest surplus	Significant surplus
6%	12%	33%	31%	18%

Expense to asset ratio

Economies of scale at larger community foundations generally drive expense-to-asset ratios down, though it should be noted that individual operating models have a major influence on this metric. There are community foundations across the field that are interested in increasing their investment in community leadership, which would be one factor in increasing this ratio for many. (n=256)

Field median: 1.2%

Funds per full-time equivalent

Larger community foundations tend to maintain relatively complex operating models, requiring a higher number of specialized staff who will be less likely to manage donor funds. (n=242)