In 2006, the Council on Foundations reported revenues of $17.2 million. A decade later, in 2016, it reported revenues of $11.6 million. That’s a pretty brutal decline in fortune—especially when you consider that many thousands of new private foundations were created during this same period.
The foundation world has expanded, yet the top trade group representing foundations has contracted. What’s going on here?
Well, one thing that seems clear is that this decline is not mainly the fault of its outgoing CEO, Vikki Spruill. As Alex Daniels reports in the Chronicle of Philanthropy, Spruill played a losing hand reasonably well, working to restructure COF’s operations and stabilize its finances.
Maybe Spruill could have generated more excitement with a stronger vision or a bolder policy agenda. But that strikes me as a big “if.”
There’s a deeper problem here than COF’s leadership or how it frames its mission.
COF is a victim of the rapid expansion of the philanthropy world and the fragmentation that’s resulted. The organization has become less relevant in a larger, more sophisticated sector with a lot going on.
Once upon a time, it must have been pretty exciting to travel to some distant city for COF’s annual conferences and meet like-minded people who also worked in foundations. In an earlier era, COF had a real competitive advantage when it came to connecting philanthropy professionals, elevating issues within the sector, and providing industry analysis and technical support. It doesn’t anymore.
COF’s added value has diminished sharply in the past decade—and so have its fortunes. In particular, three trends have worked together to undermine COF’s position.
The Rise of the RAGs
If one had to finger a single culprit for COF’s decline, it would be the rise of regional associations of grantmakers. These outfits have steadily become better resourced and more sophisticated over the past decade, including in places where there previously wasn’t a very strong foundation community.
United Philanthropy, formerly the Forum of Regional Associations of Grantmakers, says that its membership includes 67 philanthropy associations across the U.S. This group itself is now a real player in the foundation sector, putting on a national conference and offering a range of supports.
Many of its members have been growing quickly in recent years. Consider Southern California Grantmakers, which includes foundations in Los Angeles and elsewhere in the region. In 2005, this group had revenues of $1.2 million. A decade later, its revenues had risen to $4.7 million. In recent years, it’s put on an annual conference that’s grown steadily larger and it’s also doing more to support and organize foundations in its region, as we’ve reported.
Or look at the Southeastern Council of Foundations. Its budget has also grown, and last fall, I saw firsthand how impressive its annual conference has become, with over 800 people attending. SECF also convenes smaller, more specialized meetings and publishes strong research on giving in the South, as we’ve reported.
But if you really want to see a RAG on steroids, visit the offices of Philanthropy New York. Your chances are plentiful, since PNY holds events throughout the year, many of which it webcasts as part of a strong communications presence. PNY also offers any number of other opportunities for learning, support and networking.
A key driver of rising RAGs is the explosion of regional giving, which is one of the biggest stories in philanthropy right now. In turn, that trend reflects the stunning growth of wealth in parts of the country that previously weren’t so rich. Of course, robust RAGs also reflect how much philanthropoids love to talk to each other. They want to get together, compare notes and best practices, and try to figure out how to do their work better.
But here’s the thing: More than ever, the RAGs offer venues to do all that which are closer at hand and more relevant than what's offered by COF.
Affinity for All
The other day, we ran an article on a new group for funders who work on transgender issues. Now, you might wonder why grantmakers in the trans space feel they need their very own affinity group when, back in the day, Funders for LGBTQ Issues itself felt like a pretty niche outfit.
But that’s how things have gone in the past decade: In an expanding philanthropic landscape, with more specialized grantmaking happening, affinity groups have multiplied and become better resourced. There are dozens of them, some of which have sizable budgets and their own annual conferences, and offer other opportunities for learning and networking through the year.
Affinity groups provide support to philanthropoids that’s even more targeted than the RAGs. And if you consider the rise of these two kinds of groups in tandem, you really see COF’s core structural problem: Who needs it?
In describing why he stopped going to COF’s annual conferences, a program officer once told me that the events felt diffuse and not so relevant to his work. “It felt like a bunch of strangers who happened to also work in foundations,” he said.
Expanded affinity groups and RAGs aren’t the only option for foundation staff to improve their work. They can also look to an ecosystem of philanthropy consultants that’s much larger than it used to be. In addition, groups that research and analyze foundation operations have steadily expanded their reach and sophistication in recent years.
Analyzing industry trends and providing technical support is a key role of national trade associations. COF does a bunch of this work. But there’s more such activity by other organizations than ever. In particular, the Center for Effective Philanthropy has really stepped things up over the past decade, with its research, assessments, advisory services, and more. The Foundation Center has been on a roll, too, using its data in ever more creative ways to illuminate trends in grantmaking and providing sector leadership on transparency and other issues. Grantmakers for Effective Organizations and the National Committee for Responsive Philanthropy are also going strong, with their own research and events. Then there’s the new Fund for Shared Insight, which now has a staff of seven.
All this work, on top of the two other factors I’ve discussed, diminishes the need for a national foundation trade group that helps steer the sector toward better practices. The problem isn’t that COF doesn’t go good work or run interesting programs. It’s that its efforts have become less valuable in relative terms.
One thing I haven’t mentioned so far is that COF isn’t the only national foundation trade group. There’s also Exponent Philanthropy, the National Center for Family Philanthropy, and the Philanthropy Roundtable. Like the RAGs and affinity groups, these organizations offer peer support that can feel more on-point and relevant.
I also haven’t mentioned how community foundations are playing a bigger role in convening funders in different places or how newer donors—some of whom are wary of the traditional philanthropy establishment—are creating their own networks, support groups and convenings.
So where does all this leave the Council on Foundations as it searches for a new leader and looks to the future? Frankly, I don’t have a clue. The advice of some critics—that it could do better by playing a bolder role on public policy advocacy—strikes me as a nonstarter. There’s no consensus among foundations for backing any kind of hard-hitting reform agenda for the sector. A merger with another organization also seems unlikely.
It’s worth keeping in mind, though, that COF remains an institution with major assets that include its members, a substantial budget, a range of programs underway, and a national conference that still draws plenty of people. The organization has been facing some serious headwinds, but it’s not dead yet. The challenge for its next leader is to figure out where its added value really lies in today’s new—and increasingly crowded—philanthropy landscape.