News and analysis
March 27, 2014

Foundation Group Expands to Reach More Donors

The Association of Small Foundations announced today that it has changed its name to “Exponent Philanthropy” to appeal to a broader range of philanthropists who are increasingly giving through donor-advised funds and other methods.

“We realized that the specific vehicle of a private foundation—it’s not as important anymore,” says Henry Berman, the group’s chief executive. “This is about a style of giving. There are people with donor-advised funds, with checkbooks, with parts of giving circles, trusts, etc., that embody all of these characteristics.”

The association’s 2,400 members employ few or no staff members to manage foundations that represent $71.4-billion in assets and $4-billion in grant making.

Two-thirds of those gifts go to local causes, representing the “passion” and on-the-ground work that he says defines such philanthropists.

“I refer to them as 'lunch-bucket philanthropists,’” Mr. Berman says. They “roll up their sleeves and get involved” and choose to maintain lean grant-making foundations that can be more responsive than larger organizations, he says.

The name change and rebranding reflect the association’s push to expand its services to a broader audience.

The association’s staff of 19 spends about $3.5-million to show grant makers how to be leaders in their communities, how to spot strong nonprofits, and how to use their grants to build coalitions to help causes they care about.

It also provides templates for devising governance policies and instructions on how to fill out Internal Revenue Service tax forms, among other services.

“Many more philanthropists and organizations could benefit from the work they’re doing,” says Katherine Lorenz, president of the Cynthia and George Mitchell Foundation.

Ms. Lorenz joined Exponent Philanthropy’s strategy group two years ago and is now a board member. She says the organization’s services saved her time and money in helping to manage her foundation’s rapid growth, driven by the $750-million her grandfather George Mitchell left after his death in July.

“Exponent” is a play on the word’s dual meaning of being a mathematical multiplier and of being a supporter of a cause.

Ms. Lorenz says small foundations work hard “to be agents of change with little resources and little time,” and Exponent Philanthropy helps small groups expand by connecting them with a network of similar donors.

“We’re by no means 'second-classing’ foundations or getting rid of them,” Mr. Berman says. “They are, they have been, and they will continue to be our DNA.”

But expanding to serve donor-advised funds could allow the association to influence a fast-growing pot of money. Contributions to donor-advised funds in 2012 increased 46 percent while contributions to nonprofits grew by only 7 percent, a Chronicle survey found. They represent about $45-billion in assets, according to the National Philanthropic Trust.

Annie Hernandez, executive director of the Frieda C. Fox Family Foundation, near Los Angeles, is a member of the association. She welcomes the rebranding because it emphasizes the work of small foundations rather than defining them by staff size.

The group’s previous tagline, “for foundations with few or no staff,” was not appealing to her, she says.

The new tagline is “to the power of small.”

Says Ms. Hernandez: “We’ve always felt like we’ve been able to make a large impact by being small.”

Send an email to Doug Donovan.