What is the most compelling argument for continuing your family foundation, or donor-advised fund, in perpetuity? What is the most compelling argument for raising annual payouts and setting a closing date?
Whether you call it spending down, spending out, or spending up, the decision of whether to operate indefinitely or limit the lifespan of a foundation is among the most fundamental questions that foundation boards and donors can ask—and a conversation every family or board should have. This NCFP Content Collection is aimed at new donors considering what strategic lifespan will best work for their foundation, as well as existing foundations that have already set a closing date, or any family or board contemplating the question. Know of other good resources to include here? Please suggest a resource.
For additional perspectives and case studies on ending long-term partnerships with grantees, see the Content Collection, Ending Well: Exits and Spend Downs.
For additional stories of founders and donor couples who have embraced the “Giving While Living” approach to philanthropy, see the Content Collection, Giving While Living: Profiles of Donors and Families.
Are you planning or considering the limiting the lifespan of your foundation and interested in learning alongside peers? Consider signing up for NCFP’s Strategic Lifespan Peer Network.
Considering Payout and the Question of Perpetuity
Balancing Purpose, Payout, and Permanence
Report
Be sure to watch the recording of the related webinar. In partnership with the Council on Foundations, the National Center for Family Philanthropy is pleased to release Balancing Purpose, Payout, and Permanence: Strategy Guide. How much should we spend? This is an essential question for foundations, and one of the…
Alternatives to Perpetuity: A Conversation Every Foundation Should Have
Passages Issue Briefs
This Passages is aimed at new donors considering a limited lifespan for their foundation, existing foundations that have already set a closing date, or any family contemplating the question of perpetuity. Author Deanne Stone gives background on the perpetuity vs. spending down debate and discusses the motivations for considering an…
How long should your foundation or giving program last?
Report
Many donors consider the time horizon of their philanthropy only after they have been giving for some years. Perhaps they created a private foundation thinking that endowing in perpetuity was not only the norm, but the only way to set things up.
A ‘Balancing Test’ for Foundation Spending
Blog Post
Editor’s Note: This article, by Dimple Abichandani, executive director of General Service Foundation, was originally published by Stanford Social Innovation Review on February 10, 2020 with the headline: “A ‘Balancing Test’ for Foundation Spending.” One of the most important decisions a foundation makes is how much to spend each year.…
A Date Certain: Lessons from Limited Life Foundations
Report
To learn more about limited life foundations’ decisions to spend down — and the ways in which they grapple with several important issues along their journey to pursuing their goals in a finite period of time — the Center for Effective Philanthropy conducted in-depth interviews with leaders of 11 limited…
Foundation Case Studies
Sustainable Investing as Part of a 10-Year Spend Down at The John Merck Fund
Impact Story
When The John Merck Fund embarked on a 10-year spendout of its assets in 2012, the board aimed to maximize its grantmaking clout across four core program areas. The board also set another challenge: to finance the effort as much as possible with sustainable investments consistent with the Fund's philanthropic…
Legacy Report: The Robina Foundation
Report
Robina’s Legacy Report describes the lessons learned from the Robina experience and includes the Foundation’s “Guiding Principles” and a list of Robina’s grants.
The Beldon Fund: Final Impact Assessment
Report
During its time-limited lifespan, the Beldon Fund sought to maximize its impact with focused investments in environmental advocacy and health. The Fund pursued three unique but interrelated strategies to advance positive change on the issues it cared about: 1) Build capacity and clout, 2) Support civic engagement, 3) Broaden the…
The Irwin Sweeney Miller Foundation: A Study in Spend Down
Passages Issue Briefs
[Photo: The New Commons Mall in Columbus, Indiana, a centerpiece of the Irwin Sweeney Miller Foundation’s neighborhood revitilization project.] This is the story of the third generation members of the Miller family who chose to spend down the Irwin Sweeney Miller Foundation, with assets of approximately $25 million. Their story…
How to Close a Foundation: The Pottruck Family Experience
Article
With a tough economy comes tough decisions. That was true for the Pottruck Family Foundation board, which dissolved the foundation effective Jan. 30, 2009. As their assets shrank in the declining markets of 2008, the family decided that by shifting their philanthropy to a donor-advised fund, they could still direct…
The Lia Fund: An Adventure in Philanthropy
Report
Randy Lia Weil made two highly unusual decisions about the $5 million she left to be donated after her death. The first was that she appointed 14 people she knew and trusted to select the organizations and individuals who would receive funding. Most of them were lifelong activists with decades…
Sample Policies and Practices
NCFP Webinars and Teleconferences
October 21, 2021
Limited Life Foundations: Lessons from CEOs
Philanthropic purpose, impact, and perpetuity are on the minds of giving families more than ever before. Many are reconsidering the lifespan of their giving effort with a fresh lens as community needs increase and the sector evolves. Yet the opportunities of limited lifespan are often not clear or not fully…
April 14, 2016
Coming to a close: Lessons from two spend down family foundations
If your foundation decided to spend down and cease operations in a defined period of time, what might the process look like? It’s a question more family foundation boards are facing, as entrepreneurs pursue philanthropy the way they conducted business – with an exit plan in mind. This webinar will feature…
November 14, 2013
The Power of Urgency: Options for Spending Down and Limited Life Foundations
This webinar features the stories of the Eckerd Family Foundation, which was established as a limited life foundation from the outset, and the Irwin Sweeney Miller Foundation, whose board of third generation Miller family members made the decision to spend down the foundation more than 50 years after its founding.…
November 10, 2010
Giving While Living
The National Center on Family Philanthropy and The Chronicle of Philanthropy presented a teleconference on “Giving While Living” with Gara LaMarche, President and CEO, The Atlantic Philanthropies, and Lenore Hanisch, co-executive director and board and family member of the Quixote Foundation. The number of limited life foundations is increasing. Donors…
December 13, 2008
Perpetuity is a Long Time
Most foundations are created in perpetuity, but a growing number are planning to sunset, most for family or program reasons. Some foundations feel strongly that they best serve society by continuing their work over the long haul. Some simply avoid discussing the issue. Richard Moore, President of the Weaver Foundation,…
Additional Voices and Perspectives
Limited Life Foundations: Lessons in Managing Staff Transitions
Blog Post
As the CEO of a family foundation with a defined end date, I am frequently asked how we retain and motivate staff when everyone on the team knows their job will end in the not-too-distant future. As a leader, this is a tremendously interesting situation to manage. It takes careful…
Why the Raikes Foundation is Not a Perpetual Foundation
Article
People often ask me what we focus on at the Raikes Foundation (empowering young people to transform their lives) and how we do it (investing in capable people addressing under-resourced challenges where our dollars can have an outsized impact on the systems that serve youth.)
Spending down: Laurie Dachs answers questions for family philanthropies
Article
Courtesy of Jonathan Petersson from Pexels In October 2020, Nick Tedesco, president and CEO of the National Center for Family Philanthropy (NCFP), talked with Lauren B. (Laurie) Dachs, president and vice chair of the board at the S. D. Bechtel, Jr. Foundation, about spending down all assets. The Foundation was…
When it Comes to Perpetuity, Find Your Own Path
Article
Foundations’ decisions about their lifespan should not be guided by concerns about doing it right or doing it wrong; their decisions should be guided by the unique circumstances and vision of each foundation.
Can Structure Set You Free?
Article
Whether your foundation is committed to operating in perpetuity, or you’re considering a strategic lifespan, does defining the parameters of your foundation’s activity restrict or liberate you?
Four Scary Things About Spending Everything
Article
Exactly two months from now, Quixote Foundation will have spent its whole endowment other than a few funds needed to wrap up operations. Parts of this process have been pretty scary. Here are four fears we’ve faced and the reasons we’re still stoked, not spooked, about spending everything.
Considering the Choice to Spend Down is Good for Philanthropy
Article
For much of the 20th century, the vast majority of U.S. foundations operated under the idea that they would be in business forever. But as a new generation of family philanthropists take over — a growing number are deciding that they would rather grant their assets during a set period…
The Noyce Foundation: Ten Core Principles for Hands-on Philanthropy
Article
The Noyce Foundation was established in 1990 by the family of the late Dr. Robert N. Noyce, co-founder of Fairchild Semiconductor and Intel, and co-inventor of the integrated circuit, better known as the microchip. Over its lifetime, their approach to grant making evolved reflecting what the trustees have learned from…
Lessons from the Orfalea Foundation Sunset
Article
The foundation started quite traditionally with reactive grants in our local community. About halfway through our journey we shifted to proactive initiatives to tackle issues with a focus on systemic change. This resulted in several complex, multi-year initiatives built with sustainable tactics and planned exits.
Sooner Rather Than Later, Prologue: 1957-2008
Report
In 2009, following five decades of Foundation growth and impact, the Board of Directors for this family philanthropy chose to spend down all assets. In the words of its founder, this decision reflected a commitment to finding lasting solutions to California’s critical challenges “sooner rather than later.” The spend-down horizon…
Sooner Rather Than Later, Chapter 1: 2009-2013
Article
In 2009, following five decades of Foundation growth and impact, the Board of Directors for this family philanthropy chose to spend down all assets. In the words of its founder, this decision reflected a commitment to finding lasting solutions to California’s critical challenges “sooner rather than later.” The spend-down horizon…
Sooner Rather Than Later, Chapter 2: 2014-2017
Article
In 2009, following five decades of Foundation growth and impact, the Board of Directors for this family philanthropy chose to spend down all assets. In the words of its founder, this decision reflected a commitment to finding lasting solutions to California’s critical challenges “sooner rather than later.” The spend-down horizon…
Sooner Rather Than Later, Chapter 3: 2018-2020
Article
In 2009, following five decades of Foundation growth and impact, the Board of Directors for this family philanthropy chose to spend down all assets. In the words of its founder, this decision reflected a commitment to finding lasting solutions to California’s critical challenges “sooner rather than later.” The spend-down horizon…
210 Goodbyes: Lessons From Ending Grantee Relationships
Article
Consultant Ruth Norris offers insights and practical details gleaned from her experience with more than 210 exits. This essay combines her reflections with analysis of data from grantee reports and conversations with grantees and colleague funders.
Time-Limited Philanthropy: Raising the Stakes, Focusing the Mind
Blog Post
With support from the S. D. Bechtel, Jr. Foundation, NCFP spent months planning an April retreat in New York for foundations that are planning to spend down or considering the option. A pandemic intervened, so last week, we held the gathering online. It’s not an ideal way to meet new…
Research and Trends
Strategic Time Horizons in Philanthropy
Report
Strategic time horizons are increasingly becoming the subject of thoughtful discussions within philanthropic organizations, causing a shift away from in-perpetuity models as the default approach.
Time-Limited Foundations: Lessons from a CEO Peer Group
Report
Since 2019, the Dorothy A. Johnson Center for Philanthropy been facilitating a peer learning group of CEOs of limited-life foundations. One of the themes that has emerged is that the fact of having an end date influences everything about how the foundation does its work. This guide distills the experiences of…
