Every month, FoundationAdvocate (“FA”) highlights a state by providing a brief overview of its foundations in terms of performance, fees, and asset allocation. Data on Pennsylvania foundations and other states can also be found at Top Ten. The opinions expressed are FA’s.
- Performance In-Line with National Median
- Investment Expenses Middle of the Pack
- Balanced Portfolio Strategy Slightly Higher
- Largest Foundations In Battle Creek and Troy
Michigan foundations represent a good cross-section of the overall market. In virtually every metric, Michigan foundations performed at or near national levels. 5-year investment performance was 8.1%, the same as overall median for the period ended December 31, 2017 Disclosed investment expenses of 66 basis points were also in-line with just a 1 basis point difference, to the national median of 65 basis
One reason that Michigan foundations may be performing at the national average is that the portfolio strategy percentages are similar to the overall, with a slight preference for Balance portfolios.
All data used in rankings and calculations is provided by FoundationMark and FoundationIQ and reflects foundations with over $1 million in assets.
Overall Ranking by State
- Michigan foundations reported total assets of $32.7 billion, ranking 7th among states.
- Michigan foundations 5 year total asset growth of 4.3%, ranked 34th.
- The average 5 year annualized return of Michigan foundations for the period ended December 31, 2017 was 8.1%, 27th place.
- Since 2013 Michigan foundations assets have increased by $6.2 billion from $26.5 billion to $32.7 billion.
- Michigan’s growth rate (blue hashed line) of 4.3% was slower than the overall foundation universe growth rate (yellow hashed line) of 5.4%.
- Michigan foundations estimated median performance for the1-yr, 3-yr, and 5-yr periods ended Dec 31, 2017 was 14.5%, 6.6%, and 8.1% respectively.
- For the five year period, FoundationMark estimates Michigan foundations performed in line with the overall U.S. foundation universe.
Disclosed Investment Expenses
- Michigan foundations reported $108.5 million in disclosed investment expenses for the most recent year.
- Median investment expenses for Michigan foundations of 66 basis points were 1 basis point higher than the national median of 65 basis points.
The chart below shows that Michigan had a little more variations in fees than the national average as Michigan had a higher percentage in the two lowest fee groupings (on the left) as well as greater percentages paying higher fees (on the right).
Basis Points (bps): Investment fees are usually quoted as a percentage of assets. For example an investment manager may charge a 0.75% fee to manage the money that you have with the firm. The term ‘basis point’ is an easier way to say small numbers by moving the decimal point two places to the right. so 0.75% = 75 basis points, for the simple reason it is easier to say out loud “seventy five basis points” than “zero point seven five percent”.
Foundations by Portfolio Strategy
FoundationMark Portfolio Strategies
- 38% of Michigan foundations were categorized as Capital Appreciation by FoundationMark, a little higher than the national average.
- 25% of Michigan foundations had a Balanced strategy, a little higher than the national average.
- 22% of Michigan foundations were categorized as ‘Investments – Other’, 4% lower than the national average.
- 15% of Michigan foundations had a Capital Preservation strategy, in line with the national average.
Foundations by Asset Level
There are about 1,000 Michigan foundations with assets over $1 million.
- Michigan has 5 of the top 100 foundation by asset size in the US.
- 110 of Michigan foundations have assets of over $25 million.
Top 10 Foundations by Assets
- Michigan is home to 3 of the largest and best known foundations in the US, the W.K. Kellogg, Kresge Foundation, and Charles Stewart Mott Foundations.
- Kellogg and Kresge are included in the FoundationMark 15.
Foundations by County and City
- Michigan foundations received $1.3 billion in incoming contributions in the most recent year, and $8.4 billion cumulatively over the past 5 years, sixth most of all states.
Grants, Gifts and Operating Expenses
- Michigan foundations paid $2.6 billion in grants, gifts, and operating expenses in the most recent year, and $12.0 billion cumulatively over the past 5 years, seventh largest in dollar terms.
- Michigan giving growth of 6.1% per year was in-line with the national pace.
Note: Giving sums are inflated due to Kellogg Foundation Trust’s pass-through to Kellogg Foundation.