A post to Exponent Philanthropy's blog

Key Insights From the 2022 Foundation Operations and Management Report

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Exponent Philanthropy is proud to launch another edition of the Foundation Operations and Management Report (FOMR). The report continues to share important salary and administrative benchmarks. At the same time, it offers an overview on how our community of lean funders change and evolve. Thank you to the 400+ members who participated in the 2021 survey informing this report.

Below are interesting and exciting findings. However, we encourage reviewing the report in full. As always, please reach out if you have questions about the results or data.

COVID-19 grantmaking in 2020

The 2022 FOMR contains information on how lean funders responded to the coronavirus pandemic, a first for the report. 99% of lean funders made some change to their giving; and just over 40% gave more in response to COVID.

Racial equity

In this report, a greater percentage of lean funders identified racial equity as very relevant to their mission. And more than two-thirds of Exponent Philanthropy members considered racial equity somewhat or very relevant to their foundation’s mission.

We continue to see strong correlations between good grantmaking and governance practices, and the relevance of racial equity. Some highlights include:

  • CEOs whose foundations considered racial equity very relevant to their mission spent significantly more time on community engagement than those that did not.
  • The most engaged board members of the foundations who said racial equity was very relevant to their mission spent more time on community engagement and generative work compared to board members of foundations that said racial equity was only somewhat or not relevant to their work.
  • Foundations that rated racial equity as very relevant to their mission had more formal written policies than the foundations that rated racial equity as less relevant to their mission.

The intentional inclusion of diverse perspectives leads to better decision making, more equitable outcomes, and a greater philanthropic impact. That being said, lean foundation boards and staff are still overwhelmingly white, and the uptake of racial equity best practices is still relatively low.

For more on this see, Mind the Gap: Exploring the Role of Diversity and Racial Equity in Leanly Staffed Foundations.

Investment returns and mission investing

Participating foundations continued seeing strong investment returns. They reported mean net investment returns of 12.3% and median returns of 11.0%. Organizations with more aggressive investment strategies had higher net investment returns than those with more moderate or conservative strategies.

What’s more, we found that funders who engaged in mission investing earned, on average, the same rates of return as funders who did not. For the past several years, the percentage of foundations engaging in mission investing has remained low—less than 20%. However, members say that one of their biggest challenges with mission investing is the foundation’s belief that it will not earn the same level of returns.

We hope these findings help move more funders towards engaging in mission investing.

For more on mission investing, see our recent blog post, Lessons From Launching an Impact Investing Portfolio: One Family Foundation’s Journey.

Additional Resources

2022 Foundation Operations and Management Report

This unique benchmarking tool offers powerful insight into the grantmaking and operations of small-staffed foundations in the United States. Download >>

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About the Author

 Brendan McCormick, manager of research and education, works with Exponent Philanthropy’s staff, members and partners to develop research and resources that relate to foundation impact and evaluation, and foundation investments. He also leads the organization’s efforts to learn more about its community of lean funders.

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