According to The Future of Community Foundations: The Next Decade (31 pages, PDF), 69 percent of community foundations cannot cover costs from traditional fees, and 39 percent had a deficit in at least one of the past five years. The likelihood of a deficit increases with size (up to $250 million in assets) and with the percent and growth rate of donor-advised funds. At least two-thirds of all funds cost more than the revenues they generate, because of account customization, product variations, discounted fees, or their small size. Moreover, commercial funds offer stiff competition in cost, technology, and marketing. The report offers several possible survival plans, including greater specialization, partnering with other foundations, sharing best practices, and being more selective about products the community foundations offer. The report was prepared for the John S. and James L. Knight Foundation by the Foundation Strategy Group.