Family Philanthropy Playbook for Community Foundations

Unit 2: Budgeting

Community foundations are still highly reliant on administrative fees to pay for philanthropic services, but an increasing number are experimenting with other ways to pay for specialized family philanthropy services.

READ: Revenue Models

NCFP’s Community Foundations Network members tend to use one of three revenue models to drive most of their income:

  1. Fund fees – The majority do not charge extra for more intensive family philanthropy services. They attempt to limit the staff time and direct expenses to approximately what the fund’s annual fee will cover. Some will strictly segment services by fund size. Others are more flexible, realizing that the ebb and flow of actual donor use of services works out over time to be about cost neutral.
  2. A la carte fees – A few foundations augment fund fees by charging per-project or per-service fees for enhanced services ranging from customized grant programs to managing family meetings. These foundations essentially think like a philanthropic consulting firm and scope and price their work at or below market rate. In a topical call in 2017, rates of $125/hour were common. Some offer the same philanthropic consulting services to private foundations without funds at the foundation.
  3. Subscription package – A small number of foundations allow donors and fund advisors, no matter their fund size, to purchase an annual subscription to a more sophisticated set of services. The subscription includes a mix of group events and standardized services and products. A couple foundations offer such packages for rising generations of families.

In 2016, the Seattle Foundation started offering donor-advised funds at two levels of service, and fund advisors can choose to change between the options over time:

  • “Family or Personal Foundations” have a 1.25% admin fee (declining fees for higher amounts), minimum of $2,500 annual fee, and receive a full suite of philanthropic and next gen services;
  • “Community Philanthropy Funds” have a 1% admin fee (declining fees for higher amounts), minimum of $1,500 annual fee, and are more transactional in nature.

READ: Staff Costs

The Council on Foundations conducts the annual Grantmaker Salary and Benefits Survey, releasing the results each fall. Council membership is not required to participate, though a foundation must participate to access the online Benchmark Central tool that allows for more detailed comparisons. As of 2019, the survey does not distinguish differing levels of expertise of philanthropic services staff.

If a foundation is interested in activity-based costing to better understand how staff are spending time on differing functions and programs, CF Insights by Candid offers a free staff time survey tool and related instructions.

BORROW AND ADAPT: Private Foundation Services [members only]

Community foundations in Cincinnati, Chicago, the Carolinas, Hawaii, Orange County, and more shared marketing and planning samples for providing contracted work to private foundations.

Tune-In (60 minutes): Topical Call — Models for Contracted and Fee-Based Services [members only]

Staff from Community Foundations of Texas and Foundation for the Carolinas kicked off a conversation about fee-based and contracted services to private foundations.

Tune-In (60 minutes): Topical Call — Using Supporting Organizations to Support Donors [members only]

Staff from Community Foundation of Southern Arizona, California Community Foundation, and New York Trust kicked off a discussion of supporting organization policies and practices.