Understanding Context: Foundations in New Jersey

September 11, 2013

For most nonprofits, securing support from private foundations – whether family-based or independent – is essential.  No news there right? Often, the standard funding formula is a mix of government grants, earned revenue and private support, including foundations.  Adept fundraisers know that only about 11% of that private support actually comes from foundations; about 6% comes from corporations; 4% comes from bequests; and the remainder from private donors.

Recently, Geraldine R. Dodge Foundation President, Chris Daggett and I had the opportunity to speak with a group of up-and-coming staff working at various NJ foundations.  These are program officers, grant managers, finance staff and others all under the age of 42 working within private philanthropies.  These “emerging leaders” want to network and learn in order to advance their careers and the work of their individual organizations. We talked about key trends going on in the field right now. Chris offered some excellent counsel on philanthropic leadership – the challenges and the rewards. I was asked to talk about the philanthropic landscape in New Jersey.

from the Wikipedia article, below

I love when I’m asked to talk about what philanthropy looks like in NJ.  You see the reality is always a bit surprising for folks, especially when you realize how New Jersey is very different from other states.  Of course, everyone knows that New Jersey is always within in the top 3 ranking of wealthiest states in the country. The truth is that does not translate into the asset size of our private foundations.

Just consider a review of the Garden State’s largest foundations by assets. There is one very large, national foundation based here – the Robert Wood Johnson Foundation – and we are very fortunate to have RWJF here in our state.  With $9 Billion in assets, it ranks as the 3rd largest foundation in America, employs hundreds of professionals, and supports work nationally and across the state.  From there, though, assets drop quite dramatically.  This is one of the two ways that New Jersey’s foundation community is quite different than others. The next largest philanthropy comes in about $600 million, a family foundation, managed through its attorney, with no professional grantmaking staff.  New Jersey’s third largest is another family foundation with about $450 million and a small (5), professional staff.  But then we drop again to $270 million and the Geraldine R. Dodge Foundation, the largest funder focused specifically on supporting New Jersey, with a staff of 15.  At this level we begin to see several other foundations in the same mid $200 million range and then a more typical spread of endowments such as you might find in other states.

In most other states you will not find such dramatic drops as we have here AND you would find at least 2 or 3 foundations in the $1 to $3 billion range. At that level of endowment, foundations can distribute anywhere from $50 million to $140 million ANNUALLY. Think what that would mean for nonprofits. I point this out in an effort to help manage expectations.  New Jersey’s philanthropic community is different than other places and from what one might assume.

Here is another way that the philanthropic landscape is different.  New Jersey is home to only a handful of community foundations. There are three that have full-time, professional staff – the Community Foundation of New Jersey, Princeton Area Community Foundation, and the new kid on the block, the Community Foundation of South Jersey.  Ohio has 50 community foundations, Michigan over 60, and Indiana 90.  Community foundations are incredibly effective vehicles for informed, local giving.   In fact, I often suggest that anyone looking to create a foundation with less than $5 million assets should first consider creating a donor advised fund at one of our fine community foundations instead.

When you consider these two differences – the paucity of New Jersey foundations with assets between $250 million  and $3 billion, and our  number of community foundations – you  come to see a third anomaly, one that quickly becomes hugely disappointing to anyone looking for a career working at a foundation.  We have very few staffed private foundations in New Jersey. Not a week goes by when I’m not asked for advice about getting “a foundation job.” In truth there are perhaps only 20 that have staff beyond an Executive Director or Administrator. Foundation positions are very hard to come by in a typical environment – people don’t tend to leave – but here in New Jersey the pool really is smaller. However, on another side, what does that smaller pool mean for those working in philanthropy in New Jersey? There is a wonderfully collegial community, where colleagues can know each other, learn from one another, and have the opportunity to pursue collective action that will improve outcomes for New Jersey residents and communities. And that promise was fully evident among the group of bright and smart emerging leaders.

Nina Stack is President of the Council of New Jersey Grantmakers, the statewide association of more than 120 funding organizations working in New Jersey. She also serves as Chair of the Forum of Regional Associations of Grantmakers, a 34-member network serving more than 4,000 foundations, corporations and other donors across the country.