• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
News and Analysis of Foundation Investment Performance
  • About
    • Our Story
    • About Private Foundations
    • About FoundationAdvocate
  • Newsletters
    • Winter 2023
    • Autumn 2022
    • Summer 2022
  • Lists & Links
    • Press
    • Lists
      • Celebrities
      • Finance
    • Links
    • Foundation Fun
  • Are You a Foundation?
  • Contact Us

Holdings Disclosure: Who Owns What? And Who is not Saying

By

Disclosure Spectrum

Foundations are required to report the fair market value of their assets every year. The IRS further requires foundations to list their holdings by asset class on their balance sheet and provide schedules of their holdings, however, foundations interpretations of “additional detail” can vary enormously. Some foundations provide extensive lists of individual security holdings, or fund holdings, others reference custodial accounts with managers, some detail asset class subcategories, and still others provide the bare minimum to comply with the disclosure requirements.

What's Required

As a starting point, fair market value is the most important disclosure requirement. The main condition for tax exemption is that foundations must distribute 5% of their assets every year.  Without a fair market value, one couldn’t calculate how much a foundation would need to distribute to satisfy the payout rule.  Therefor the IRS needs the fair market value as a component of the calculations to verify that a foundation is living up to its end of the bargain. 

Foundations are required to submit a balance sheet listing values of asset classes such as cash, stocks, and bonds (bonds are split into corporates and government classes).  Investment assets that fall outside the traditional classes are typically reported in the catch-all category “Investments – Other”, which is where hedge funds, private equity, venture capital, and more investment vehicles reside. 

"Required" but Often Ignored

Foundations are instructed to “attach a schedule listing and describing each of these investments held at the end of the year”, but what accounts for a “schedule” can vary considerably.  Some foundations list their holdings all the way down to the security level – for example exactly how many shares of which stock they own. Other foundations simply don’t reveal anything beyond the value of their holdings.  Foundations seem to have a great deal of leeway in the level of disclosure on their assets.  

 “Investments – Other” accounts for about 40% or nearly $500 billion dollars of total foundation assets. Not all of these billions are in “alternative assets”, as some foundations include mutual funds or other public investments into “Investments – Other”, and still others “kitchen sink” the disclosure and simply list everything in the category. 

It bears noting that foundations that are invested in partnerships such as hedge funds or private equity cannot get to the security level of granularity as the the underlying positions in the funds aren’t always disclosed, and even if they were it would be reporting nightmare – just imagine how a foundation would report a hedge fund’s short position. 

Top Foundations Holding Transparency

As one can see from the table above, even top foundations’ holdings disclosure can vary a great deal.  Gates, Lilly, Chan Zuckerberg, and Woodruff are the most transparent, while Getty, Bloomberg, Walton, and others are considerably more opaque.  

Click to See Holdings

Bill & Melinda Gates Foundation Trust                                                   

Lilly Endowment Inc                                                       

Ford Foundation                                                             

J Paul Getty Trust                                                            

Robert Wood Johnson Foundation                                                          

William & Flora Hewlett Foundation                                                       

Foundation To Promote Open Society                                                    

Bloomberg Family Foundation Inc                                                            

David And Lucile Packard Foundation                                                     

W K Kellogg Foundation Trust                                                    

John D & Catherine T MacArthur Foundation      

Andrew W Mellon Foundation                                                  

Gordon E And Betty I Moore Foundation                                                              

The Leona M & Harry B Helmsley Charitable Trust                                                            

Walton Family Foundation Inc                                                   

Chan Zuckererg Foundation                                                        

Rockefeller Foundation                                                

Conrad N Hilton Foundation                                                       

The JPB Foundation                                                       

The California Endowment                                                         

Robert W Woodruff Foundation Inc                                                        

Filed Under: Newsletters, Autumn 2021

Primary Sidebar

Topics

Performance

Expenses

Trustee Resources

Foundation Facts

Quarterly Newsletters

Newsletters

  • Winter 2023
  • Autumn 2022
  • Summer 2022
  • Spring 2022

Subscribe to Newsletter

Footer

Are you a trustee?

Interested in a free FoundationMark report on your foundation’s investment performance? click here

Contact Details

E-Mail: info@FoundationAdvocate.com

Visit Our Related Websites

FoundationMark.com and FoundationIQ.com

Copyright © 2023 Foundation Financial Research, LLC