GEOList Summary: Operating Budget vs. Grant Budget vs. Annual Earnings

When we began our foundation 12 years ago, there was this mythical number that your annual administrative costs should not be more than 10% of I don’t even remember what. As assets soared there was little talk of this ratio. Assets shrank the talk started again. I recently heard Mark Kramer of FSG say that the administrative costs of a foundation are not an indicator of the quality and the impact of a foundation. The peers I talk with agree that how philanthropy does it works varies greatly and the role of grants has changed and often is not the most powerful tool for systemic change. At the same time, what is a good philanthropic benchmark for operating costs (whose definition varies too)? Many Board members still want to have a rule of thumb.