New Reports on Strategic Time Horizons in Philanthropy
Earlier this year, Rockefeller Philanthropy Advisers published the most up-to-date reports on foundation decisions regarding “strategic time horizons.” The first report includes information provided by 150 non-operating and operating foundations in the United States, United Kingdom, India, Belgium, and Chile. The second report focuses on family philanthropy and is based on information provided by 201 philanthropic families representing 28 countries. Both reports were supported by The Atlantic Philanthropies, which recently celebrated more than 35 years of giving away some $8 billion by closing its doors during the lifetime of its donor, Charles F. (“Chuck”) Feeney.
The reports confirm that “philanthropic time horizons have become an increasingly central strategic consideration for foundations.” Key findings include:
Time limits are trending upward. Nearly half the organizations formed in the 2010s are limited-life foundations.
Some issue areas are more likely than others to inspire time limits, most notably environmentalism/conservation.
Different motivations are inspiring time limits. Quoting from the first report, “Specifically, time-limited organizations were primarily concerned with donor intent, quicker transfer of funds, greater impact through narrowing focus, and mitigating the risks of lack of next-generation interest or involvement.”
Time limits lead to changes in grantmaking. These include providing fewer, but larger, grants; limiting the geographic or programmatic scope of work; and focusing on strategic outcomes.
Founders largely drove the decision to become time-limited. In family philanthropy, where the goal of multi-generational involvement in giving more frequently leads to adoption of the in-perpetuity model, the leading reason for choosing limited life was the “desire to see the impact on beneficiaries during a founder’s lifetime.”
Respondents who choose to maintain a commitment to perpetuity cite three main reasons:
They wish to make an impact on place, issue(s), or population over a long period of time, noting, “While today’s problems may seem dire, tomorrow’s are likely worse.”
They hope to engage future generations of family members in philanthropy as an additional means to transmit family values and maintain family unity.
They anticipate increased financial resources in the future via bequests, business sales, etc.
Individuals, families, and foundation boards engaged in time-horizon conversations will find the reports interesting and informational as they make the decision most appropriate for their particular values and mission and—ideally—most in line with the wishes of their donors. For an in-depth discussion of time horizons and the preservation of donor intent, see The Philanthropy Roundtable’s new guidebook on donor intent, particularly Chapter 3, “Choosing a Timeframe for Donating.”