Quaker City

## Approach & Strategy

Quaker City is a private non-operating foundation (IRS foundation code 4) with NTEE classification T22Z (Private Grantmaking Foundations), headquartered in Chester Springs, Pennsylvania. Established in 1997, the foundation has operated for nearly three decades as a dedicated grantmaking entity.

Key strategic characteristics:

• High-output grantmaker: Unlike many foundations of its size, Quaker City distributes an extraordinarily high percentage of its assets annually. With $1.1M-$1.5M in annual grants against a $7.6M book asset base, the foundation's payout rate of 15-20% of book assets far exceeds the IRS minimum of 5%.
• Spend-down trajectory: Assets have declined from $9.6M (2019) to $7.6M (2023) in book value, suggesting the foundation may be pursuing a deliberate spend-down strategy or simply prioritizing immediate charitable impact over endowment preservation.
• Professionalized management: Unlike many foundations of similar size, Quaker City pays officer compensation ($81K-$123K annually), indicating dedicated professional staff rather than purely volunteer governance.
• Significant administrative infrastructure: Administrative expenses of $239K-$440K suggest the foundation employs staff and conducts due diligence on its grantmaking, not merely writing checks.
• Self-funded endowment: The foundation receives no external contributions, relying on investment income from a portfolio of government obligations ($2.6M), corporate stocks ($893K), and corporate bonds ($377K).

## Funding Patterns

Annual Grantmaking Volume (2019-2023):

Trends observed:

• Accelerating distributions: Grants increased from $1.15M (2019) to $1.55M (2022) before pulling back to $1.41M (2023). The 2022 peak coincided with large capital gains ($2.46M).
• Asset base erosion: Book value assets declined 21% from $9.6M to $7.6M over five years, while FMV dropped more dramatically from $12.4M to $8.1M (35%), reflecting both distributions and market conditions.
• Exceptionally high payout: At 13-19% of book assets annually, Quaker City distributes 3-4x the IRS minimum. This is unusual for a foundation not explicitly structured as a spend-down.
• Revenue volatility: Annual revenue swings from $415K to $2.6M, driven primarily by capital gains. Grant levels remain relatively stable regardless of revenue, suggesting a commitment to consistent giving.
• Growing officer compensation: Officer pay increased 52% from $81K (2019) to $123K (2023), possibly reflecting increased workload or market adjustments.

## Peer Comparison

Quaker City's grantmaking profile is unusual for its asset class. Below is a comparison with similarly-sized private foundations in the Pennsylvania/Mid-Atlantic region:

Positioning:

• Outlier payout rate: At 18.5%, Quaker City's payout rate is 3-4x higher than typical peer foundations, which cluster around the 5-6% IRS minimum. This makes it one of the highest-payout foundations in its size class.
• Potential spend-down: The combination of high payouts, declining assets, and no new contributions suggests this may be a time-limited foundation, potentially planning to distribute its remaining assets within the next 5-10 years.
• Administrative cost ratio: Administrative expenses represent 31% of total grants ($440K admin vs. $1.4M grants in 2023). This is notably higher than peers (typically 10-15%), though it may reflect the complexity of managing a high-volume grantmaking program.
• Scale relative to peers: While small by absolute measures, Quaker City punches well above its weight in annual distributions, outpacing foundations with 2-3x its asset base.
• Regional context: Chester County, PA is home to numerous foundations. Quaker City is mid-sized for the county but distinctive in its aggressive distribution approach.

## Recent Activity

2023 Filing Highlights (Most Recent Available):

• Distributed $1,412,673 in charitable grants — a slight decrease from the 2022 peak of $1.55M but still historically high
• Total assets of $7,620,391 (book) / $8,132,253 (FMV) — a significant decline from prior years
• Officer compensation of $123,024 — the highest level in the five-year period, representing a 52% increase from 2019
• Administrative expenses of $439,839 — also the highest on record, up from $237K in 2019
• Investment income: Dividends $104K (declining from $212K in 2021), capital gains $134K
• Total revenue of only $415,464 against total expenses of $1,852,512 — a deficit of $1.44M
• The foundation spent $4.47 for every $1 of revenue earned, clearly drawing down its endowment

Asset Allocation Shift (2021 to 2023):

The foundation has dramatically restructured its investment portfolio: - Government obligations: $897K (2021) → $2,643K (2023) — increased 195% - Corporate stocks: $1,779K (2021) → $893K (2023) — decreased 50% - Corporate bonds: $1,017K (2021) → $377K (2023) — decreased 63%

This shift toward government securities suggests a more conservative, capital-preservation stance consistent with a potential spend-down strategy — protecting remaining assets while continuing high distributions.

Operational trajectory: The combination of accelerating expenses, declining revenue, and a shift to conservative investments indicates the foundation is in a mature phase of its lifecycle, potentially approaching conclusion within the decade.

## Application Tips

Important: Quaker City does not appear to accept unsolicited grant applications. This is a private non-operating foundation that supports pre-selected organizations.

For organizations seeking to connect with this foundation:

1. Research grantee networks: With $1.4M distributed annually across what are likely dozens of grantees, the foundation has a substantial portfolio of supported organizations. Reviewing the full 990-PF filing (Part XV - Grant Details) would reveal specific grantees and grant amounts.

2. Chester County connection: Based in Chester Springs (Chester County, PA), the foundation likely has strong ties to the local community. Organizations active in Chester County may have an advantage.

3. Grant size expectations: With $1.4M distributed annually, individual grants could range widely. The high officer compensation and admin costs suggest careful selection and due diligence, so fewer, larger grants ($25K-$100K range) are likely rather than many small grants.

4. Time-sensitive opportunity: The foundation's apparent spend-down trajectory means its grantmaking window may be limited. If you identify a connection, acting sooner rather than later is advisable.

5. Professional management: The paid officer structure suggests the foundation may be more receptive to professional outreach than typical family foundations. A well-crafted letter of inquiry to the Chester Springs address may be appropriate.

6. NTEE code T22Z: The broad "Private Grantmaking Foundations" classification provides no topical restriction, meaning the foundation may support a wide range of charitable purposes. Look for patterns in its actual grant distributions.

7. No website application portal: While the foundation has a website (quakercity.org), grant applications should be directed through traditional channels. The foundation's address is in Chester Springs, PA 19425.