Writing at Inside Philanthropy, David Callahan follows up on his previous article about the intentionally heavy-staff model used by many legacy foundations.
He cites a study by Exponent Philanthropy that surveyed nearly 800 members of the organization. The survey, of people associated with foundations with little or no staff, found that foundations can stay informed, make lots of grants, and produce reasonable returns on the invested funds with very low staffing levels.
He points out that the study does not deal with the outcomes issue. There is no indication in the study that the lower staffing model produce better outcomes that other models.
That is the central issue. Nobody knows whether the extra staffing of legacy foundations improves their outcomes or lean staffing hurts the actual outcomes.
I like his closing comments:
Legacy foundations either need to make a convincing case for their operating model or start downsizing.
(Actually, that’s not true. These foundations don’t “need” to do anything since they’re basically accountable to nobody and can be as inefficient as they want—which just maybe explains the problem here.)
Great point. When you think about it, a foundation with a large endowment balance isn’t accountable to anyone.