New Study Confirms 46% Lower Costs for Private Foundations

Foundation Source has recently published the results of a study in an article entitled The Effect of an Outsourced Services Model on the Operating and Administrative Expenses of Private Foundations.

Here is a summary of the study as provided by Mike Hogan, Foundation Source, Sr. Managing Director:

We analyzed the operating and administrative expenses (“Operating Expenses”) of private foundations to compare costs for those that outsource back-office, technology and support services to a third-party firm, such as Foundation Source, with those that choose the more conventional approach of managing the foundation by unpaid family members, paid staff and with assistance from legal and accounting firms.  Outsourced services include back-office functions such as accounting and tax preparation, filings and compliance with the IRS Code and state requirements, and the payment of grants, expenses and taxes, as well as technology for foundation management and grants management, and general day-to-day support.  The study finds that Outsourcing Foundations report lower average Operating Expenses – both as a percentage of assets and as a percentage of total charitable disbursements.