Larger community foundations will achieve an economy of scale that keeps their expense to asset ratio relatively low compared to smaller peers. This ratio is a shorthand to understand the “leanness” of a community foundation’s operating model but is highly informed by several factors such as the local cost of living and the depth of the foundation’s investment in various forms of community leadership. (n=188)

Slightly fewer than half of all community foundations in the sample ended FY23 with an operating surplus, after two straight years in which two-thirds of the sample carried a surplus at year-end. Typically, administrative fees will be supplemented by other sources of revenue to support operations, with unrestricted dollars covering any remaining shortfall, though this will impact the ability of the community foundation to make or deepen an investment in efforts of community leadership and other mission-aligned initiatives.

Operating budgets remained relatively flat in this year’s sample (n=143) with a median increase of 2%. Across all asset size cohorts, roughly two-thirds of the operating budget will go toward staff expenses on average (n=184).

While administrative fees assessed on donor funds will nearly always provide most of the revenue needed to support operations, direct fundraising from individual donors, internal distributions from the community foundation’s operating funds, and fee for service revenue provide additional support.

Every community foundation that said they take action to activate dormant DAFs do so after no more than five years without fund activity, and 85% of respondents said they take action after three years. In cases where the time horizon may extend beyond five years, it will typically be a case of the donor intending to make more impactful grants after some period of growth for their fund. (n=141)

Nearly all survey respondents said they would, at minimum, attempt to contact the holder of a dormant DAF to encourage them to activate their fund. Follow-up steps are varied but commonly include distributing the fund in alignment with the donor’s original stated intent or transferring the fund to the community foundation’s own unrestricted fund. (n=163)

Nearly 70% of survey respondents said they have a written policy to activate dormant DAFs after the passage of a predefined, agreed upon period of time without the recommendation of a grant by a DAF holder. It’s expected that some portion of the 24% of survey respondents that didn’t respond to this question have such a policy in place as well. (n=183)

DAFs hosted by community foundation are shown to broadly and consistently maintain relatively high distribution rates as compared to other fund types. Close to half of all community foundations reported an aggregate DAF distribution rate of over 10 percent, while a little less than a quarter of the sample reported double-digit distribution rates across all fund types. Overall distribution rates tend to be higher at larger community foundations, which have a higher proportion of both DAFs and non-endowed funds than their smaller peers. (n=483)