Controlling Fees

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Most of us have become a little wiser about the need for good asset allocation after the 2001 and 2008–2009 financial crises that left many foundations, and consequently grantees, with significantly less money. A cover article in The Chronicle of Philanthropy in 2005 (April 14), though, brought to light another important, but often forgotten, fiduciary responsibility: controlling investment expenses.

Many charities and foundations, according to that article, believed they were losing millions of dollars each year to the very institutions they paid to safeguard their assets. Some institutions settled with these charities, whereas others continued to take excessive fees, having learned from experience that foundation and charity boards tend to not rock the boat.

This resource sheds light on how these small fees can add up to significant figures and why it might make sense to rock the boat.

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