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

It will come at no surprise that administrative fees on funds act as the main driver of community foundation operating revenues. No asset size cohort, on average, acquires less than two-thirds of all operating revenue from admin fees. There will, however, be differences in the extent to which community foundations of different sizes depend on other sources of revenue. Smaller community foundations will rely on direct fundraising and internal distributions to support operations to a greater degree than larger community foundations, who will see slightly more revenue come from specialized fee for service work.

In addition to sustaining a community foundation's operating model, diversified revenue can help create the needed capacity to pursue foundation-led community efforts (e.g. community leadership or special initiatives).

Averages were used to total 100%. (n=238)

Asset size range

	$0-$25M	$25-$50M	$50-$100M	$100-$250M	$250-$500M	$500M+	All
% Administrative fees	67%	68%	71%	80%	83%	73%	73%
% Fees for service	1%	0%	1%	1%	2%	3%	1%
% Fundraising: operations	11%	11%	9%	5%	3%	4%	7%
% Fundraising: programmatic	7%	6%	4%	4%	3%	6%	5%
% Distribution from endowment/reserve	11%	10%	9%	8%	5%	5%	8%
% Other revenue	4%	5%	5%	3%	4%	10%	5%

Operational expenses

Across the field, no significant differences in the breakdown between staff and non-staff expenses are observed. It's typical for two-thirds of operating expenses to go toward staff capacity.

Averages were used to total 100%. (n=240)

Asset size range

	$0-$25M	$25-$50M	$50-$100M	$100-$250M	$250-$500M	$500M+	All
Personnel expenses	64%	64%	66%	67%	70%	66%	66%
Non-personnel expenses	36%	36%	34%	33%	30%	34%	34%

Differences in the proportion of personnel to non-personnel expenses are relatively minor when comparing community foundations of different sizes. Insofar as differences do exist can be observed in smaller community foundations, which may have very few staff.

Averages were used to total 100%. (n=256)

Asset size range

Size of foundation	Personnel expenses	Non-personnel expenses
$0-$25M	64%	36%
$25-$50M	63%	37%
$50-$100M	67%	33%
$100-$250M	68%	32%
$250-$500M	69%	31%
$500M+	68%	32%
All	66%	34%

Surplus vs. subsidy

There was a slight decrease in the number of respondents who reported operating expenses in excess of revenues; 26 percent, down from 28 percent in FY17.

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.

Averages were used to total 100%. (n=240)

Significant subsidy	Modest subsidy	Breakeven	Modest surplus	Significant surplus
7%	11%	31%	37%	15%

Expense to asset ratio

It's typical to see a lower expense-to-asset ratio at larger community foundations where an economy of scale is achieved, though operating model differences at individual community foundations will have an impact on this metric. In combination with asset growth stagnation, a trend toward embarking on foundation-driven leadership efforts is resulting in higher expense-to-asset ratios across the field. Medians for three out of six asset size cohorts are higher than they were in FY17. (n=240)

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=223)