According to Fidelity Charitable, a private family foundation is “a type of private foundation set up by a family, funded with the family’s assets and often run by family members who can also participate in its charitable grantmaking.” Our annual Foundation Operations and Management Report (FOMR) gives insights into the grantmaking, operations, and management of foundations with few or no staff. In the 2024 edition, a little more than half of respondents (54%) identified as family foundations.
In this blog, I discuss our data on family foundations and how they compared to independent foundations and other foundations (community foundations, operating foundations, corporate foundations, public charities, etc.)
Data on Family Foundation Boards
Of the 54% of family foundations who participated in the 2024 report, about half (53%) had only family members on their boards. The other half (49%) had at least one nonfamily member. However, across all family foundations, the representation of family members as a proportion of the board was high. The average proportion of family board members was 81%, and the median proportion of family board members was 100%.
Bringing one or more nonfamily members onto the board of a family foundation can have benefits, including:
- Supplementing skills, expertise, and networks
- Augmenting diversity
- Preventing family dynamics from derailing productivity
- Enhancing the foundation’s public standing
That said, a nonfamily member’s impact will depend on the individual’s character, personality, expertise, and the family’s support of having that specific person on the board.
Learn about involving nonfamily members in the foundation »Board Size and Demographics
Though board size varied greatly among all foundation respondents, the majority (73%) had between 3 and 9 members, and the median and mean board sizes were relatively similar: 6.0 and 6.8 members, respectively. Family and independent foundations had smaller boards, on average, than other foundations. But family and other types of foundations had about 10% more female board members, on average, than independent foundations.
Family foundations also had a significantly higher percentage of board members who identified as White compared with independent and other types of foundations. Family foundations have specific challenges regarding the diversity of their boards. The 2023 FOMR reported family foundations tended to have fewer board members who identified as Black, Indigenous, (and) People of Color (BIPOC) (5%) than independent foundations (16%).
Compensation for Routine Board Service
All foundations rely on trustees for leadership, oversight, and planning. But many lean foundations also rely on trustees for a considerable amount of the labor needed to run a foundation. To acknowledge the crucial role that trustees play in their governance and operations, some foundations compensate members for routine board service, such as attending meetings, reviewing proposals, and setting policies. Others do not.
In the 2024 FOMR, one-third (33%) of participating foundations compensated members for routine board service, of which, a little less than a quarter (24%) were family foundations.
Among the one-third (33%) of all participating foundations that compensated board members for routine service, the average annual compensation was $22,432, and the median annual amount was $8,700. These amounts have increased compared with findings in past years. You can find the family foundations average and median board compensation amounts on page 101 of the appendix.
Get the primer, “Board Compensation: What Is the Right Answer for Your Foundation?”
Data on Staff at Family Foundations
Of the little more than half (54%) of respondents who identified as family foundations in the 2024 FOMR, two-thirds (67%) had paid staff. For those family foundations with paid staff, 35% had full-time staff related to the donor family, and slightly more than one-third (35%) of full-time CEOs/top administrators were relatives of the donor family.
Family foundations also name advantages and disadvantages to hiring family members as staff. One advantage is that the individual is probably more aware of family values, history, and the goals of the foundation. This could help them better express the foundation’s identity to potential grantees and the public. A family member might already have relationships with board members and even grantees, and a family member is more likely to have a long-term commitment to the foundation.
On the other hand, it may be difficult to find a family member with the skills and expertise necessary to run the foundation. Depending on the person and family, it could also be challenging for the family member to remain objective when it comes to family dynamics and relationships, and they may not offer much diversity of perspective.
To get the annual base salaries of full-time CEOs/top administrators, professional/grantmaking staff and administrative/support staff at family foundations by asset size, see pages 84–93 of the appendixes.
Equity
Compared with other foundation types, family foundations were more likely to:
- Have boards with organizational policies dedicated to creating a more equitable environment.
- Provide intentional support for the board and staff to address racial and ethnic inequities.
- Implement the same racial equity practices and policies required of their partners and/grantees.
Compared with both other foundation types and independent foundations, family foundations were also more likely to have their board complete training and/or self-assessment on racial equity–related topics (e.g., cultural competency, implicit bias).
Perpetuity
Philanthropists have debated whether a foundation should exist in perpetuity for more than a century. Family foundations were significantly more likely to say they intended to exist in perpetuity compared with independent and other foundations. More than one-third (39%) of family foundations said they intended to exist in perpetuity compared with 33% of independent foundations and 7% of other foundation types.
Grantmaking Applications
Out of all foundation types, family foundations were most likely to accept and approve grant proposals on a rolling basis. They were also the least likely to accept paper applications.
Advocacy
Private foundations can engage in advocacy, fund advocacy, and encourage grantees to engage in advocacy, with exceptions involving lobbying and electioneering. Family foundations were the most likely to commission, fund, or conduct research in their issue area and meet with policymakers or politicians to educate them about their issue area compared with independent and other types of foundations.
Discretionary Grants
Some foundations let board members—and in some cases committee members, family members, or staff—direct a portion of grantmaking dollars to organizations of their choice. This is called discretionary grantmaking. While the board is legally responsible for all discretionary grants, these grants are generally approved without extensive review or discussion and are made at the discretion of individuals. More family foundations provided discretionary grants (51%) than independent foundations (37%) and other types of foundations (25%).
Of the 44% of all foundations overall that gave discretionary grants, respondents awarded 26, on average, in the preceding fiscal year, accounting for 18% of the foundation’s total grantmaking budget. The average discretionary grant amount was $20,676 (median of $7,052), and of all grant types outlined in this report, the average grant amount for discretionary grants was markedly lower than for other grant types.
Don’t Skip the Appendixes!
See the appendixes for even more data on family foundations, including:
- The annual value of staff benefits as a percentage of annual base salary (p. 98)
- Operating and administrative expenses (p. 103) and median charitable operating and administrative expenses (p. 107)
- Charitable expenses as a percentage of qualifying distributions (p. 111)
- Average charitable operating costs for each $1 in grants (p. 115)
- Grantmaking and leadership strategies (p. 118)
About the Foundation Operations and Management Report
The 2024 Foundation Operations and Management Report provides a snapshot of participating organizations’ practices. It is based on the responses to Exponent Philanthropy’s 2023 Foundation Operations and Management Survey and relates to information about responding foundations’ most recent completed fiscal year. Of 1,565 foundations, 373 Exponent Philanthropy members completed the 2023 Foundation Operations and Management Survey (FOMS) for a 24% response rate. Get your copy now »
Nonmembers Can Download the Executive Summary for Free »About the Author
Hannah Smith creates and updates content with members and staff, upholding editorial quality and maintaining the voice of our CEO and organization.