The Pittsburgh Foundation has increased its assets under management by more than $25.4 million in 2010 by bringing a number of small private family foundations under its wing, the Pittsburgh Business Times reports.
So far this year, five foundations have chosen to operate under the aegis of the larger foundation, with at least four more likely to follow suit. Prompted by a growing number of queries from smaller philanthropies challenged by rising administrative costs, generational leadership changes, and the 5 percent payout requirement, the foundation, which oversees assets of $700 million, began courting smaller family foundations late last year. According to research by the foundation, there are roughly 550 private foundations in southwestern Pennsylvania with assets of less than $2 million.
The strategy to cultivate these smaller organizations has paid off, enabling the foundation to increase its grantmaking, expand its donor reach geographically, and keep money in the region. Given that the foundation typically receives 60 percent of its gifts during the final three months of the year, it expects to further increase its assets through year-end and to partner with more small family foundations in 2011.
"Having your own private foundation doesn't work well for everybody and is not always the best model, for reasons having to do with privacy, cost, and quality of services, particularly if someone wants to make an impact in a community where they made their money," Pittsburgh Foundation president and CEO Grant Oliphant told the Pittsburgh Business Times. By utilizing the back-office capacity of the foundation, "[s]omeone can have the independence of an individual family or private foundation but with the resources and backup experience that a community foundation is so good at."