Thus, 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." In other words, as the Foundation Management Institute put it, "the staff gave one dollar to itself for every three dollars it contributed to charity" -- a handling charge of 24 percent.
Now, nobody wants the staffs of important foundations to live in penury, and there is no question that the sound administration of organizations that give away tens or even hundreds of millions of dollars a year requires oversight that can be expensive. But are such enormous "administrative expenses" genuinely justified?
One comparison is certainly suggestive. 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."
It would certainly seem to be high time that somebody -- perhaps the IRS? -- told major foundations that their expenses will henceforth be examined more closely, lest the charity that the administrators bestow on themselves threatens to outstrip what they manage to give away.