Foundations increasingly are augmenting their traditional grantmaking role by engaging in direct charitable activities, a new report says.
The Foundation Center has published the results of a recent survey, “More Than Grantmaking: A First Look at Foundations’ Direct Charitable Activities,” that examines the use of operating programs by more than 900 of the 3,000 largest foundations in the U.S.
Operating programs include direct charitable activities like convening conferences for a broad audience, providing grantees with technical training, and encouraging foundation staff to serve in board or advisory roles to other nonprofits.
Nearly one in four foundations surveyed have such operating programs. In justifying this trend, many cited a desire to promote organizational effectiveness in their grantmaking, while others emphasized the opportunity to build capacity and collaboration efforts among their grantees.
Examples of operating programs included in the report reflect this variety of motivations.
Some efforts target specific grantee populations, while others serve the wider community, like the Annie E. Casey Foundation’s program for vulnerable children or The California Endowment’s One-e-App online enrollment program for health and social services.
This non-traditional role in all its facets seems to be growing among foundations, the report says.
Of the 684 independent and family foundations surveyed, six in 10 said they had expanded the scope of their direct-service activities in the past five years, and three in four believe the practice is spreading.
Foundations with large endowments proved more likely than smaller foundations to operate their own programs, with half of those with annual giving averaging of $10 million or more reporting doing so.
Yet community foundations were by far the most likely of the group to have operating programs.
Among community foundations, more than six in 10 percent reported engaging in direct-service activities, compared to one in four independent or family foundations, and fewer than two in 10 corporate funders.
Virtually all respondents with operating programs were professionally staffed.
“These activities represent an increasingly hands-on approach by foundations and explain in part their need for professional staff,” Loren Renz, report author and senior researcher for special projects at the Foundation Center, says in a statement.
Established in 1956 with the goal of increasing philanthropic transparency, the Foundation Center connects nonprofits to grantmakers and provides them with tools and information through their research, education, and training programs.