Liberal Foundations Equals Liberal Costs

It’s not just that charitable foundations often end up doing exactly the opposite of what their founders intended.

The problem is that they spend so much money doing it. As William Rusher writes:

Robert Wood Johnson’s charitable contributions for 2005 were a majestic $419 million. But the "administrative expenses" required to distribute this largesse totaled $69 million. Kellogg contributed $285 million, but chalked up "administrative expenses" of $65 million. And the Rockefeller Foundation, in the course of giving away $148 million, found it necessary to spend $36 million on — you guessed it — "administrative expenses."

That’s a pretty big tariff.  Of course, when you are hobnobbing with grantees with expensive tastes no doubt you have to meet and beat their expensive tastes. 

I mean, there’s an argument that in discussing compassionate and sensitive programs to help women and children with like-minded compassionate souls you can’t really be super-sizing it at McDonalds.  A more nuanced location for nuanced thinking and planning is needed.  And that costs money.

But still, giving yourself 25 cents of every dollar you give away does seem excessive.

Especially when you consider the case of The Walton Family Foundation—you know, the foundation founded by Wal-Mart founder Sam Walton.

The Walton Family Foundation managed to give away $232 million in 2005, while charging expenses of only $2 million. As Neal Freeman, Chairman of the Foundation Management Institute, remarked, "Ol’ Sam would be proud of that 1.2 percent mark-up."

Of course, Wal-Mart was always a low-rent corporation.  No class.