Spend Down vs. Perpetuity

Discussion, debate, and case studies from the Donor Intent Resource Library

The following is a section of The Philanthropy Roundtable's extensive Donor Intent Resource Library. Click here to see the full library.


The Question of Perpetuity

"The Gospel of Wealth" by Andrew Carnegie

The famous essay contains an impassioned plea to the wealthy to give their money away while they are still able to do so. (Despite tireless efforts, Carnegie himself was not able to spend down his fortune before he died.) Nevertheless, this remains one of the best known and most impassioned arguments for giving while living.

 

Should Foundations Exist in Perpetuity? by Heather R. Higgins and Michael S. Joyce

Heather R. Higgins argues for foundation sunset laws. Michael S. Joyce counters that under the right conditions, foundations can be trusted to carry out the wishes of their founders.

 

What Your Money Means: And How to Use It Well by Frank Hanna

A contemporary donor offers his own update of Andrew Carnegie's argument in "The Gospel of Wealth" to give while you live. Read George Weigel's review of the book for Philanthropy.

 

Should Foundations Live Forever? The Question of Perpetuity by Martin Morse Wooster

The most thorough study of the subject available, this booklet first gives a brief history of perpetuities in America and then provides in-depth profiles of donors who chose for and against perpetual foundations, including George Eastman, the Jacobs family, Max Fleischman, Vincent Astor, and many more.

 

"Spending Down vs. Perpetuity: How to Achieve Your Charitable Objectives" by Michael A. Cawley, Eugene W. Cochrane Jr., Heather Higgins, Frederick A.O. Schwarz Jr., and William A. Schambra

In this Philanthropy Roundtable discussion at the 2010 Annual Meeting, the heads of the Randolph Foundation and the Atlantic Philanthropies make the case for spending down, while leaders from the Samuel Roberts Noble Foundation and the Duke Endowment defend perpetual foundations.

 

Case Studies

Atlantic Philanthropies

"Secret Donor Man" by Scott Walter

Chuck Feeney, a billionaire co-founder of Duty Free Shoppers, quietly set up the Atlantic Philanthropies and gave it nearly all his fortune. Now he and Atlantic Philanthropies—the largest endowed institution in history to spend itself down—are evangelists for term-limited giving. Walter reviews his authorized biography The Billionaire Who Wasn't: How Chuck Feeney Made and Gave Away a Fortune Without Anyone Knowing by Conor O'Clery, and for a one-hour video interview with Feeney, see Secret Billionaire: The Chuck Feeney Story

 

"Turning Passion Into Action" by Atlantic Philanthropies

Atlantic Philanthropies published this report "to inspire individuals at varying levels of wealth to actively give their funds, skills, and time during their lives, and receive enormous satisfaction in the process." This publication covers many practical questions and profiles Charles Feeney and 10 other donors who are Giving While Living.

 

"Giving It All Away: Strategies from the Spend-down Experts" by James Piereson and Gara LaMarche

The former heads of two foundations, one spent down and one spending down, discuss their experiences at the 2011 Philanthropy Roundtable Annual Meeting.

 

Avi Chai Foundation

"First Annual Report to the Avi Chai Foundation on the Progress of Its Decision to Spend Down" and "Second Annual Report to the Avi Chai Foundation on the Progress of Its Decision to Spend Down" by Joel Fleishman

Fleishman reports on the progress of a major Orthodox Jewish funder that has term-limited itself.

 

Beldon Fund

"Giving While Living: The Beldon Fund Spend-out Story" by the Belton Fund

In 1998, John Hunting, founder and chair of the Beldon Fund, committed to spending down his $100 million endowment within 10 years. The Beldon Fund officially closed its doors in 2009, having spent more than $120 million in grants and foundation-directed projects. In this report the fund shares strategies and lessons from its spend-down experience.

 

W. H. Brady Foundation

"Spending Down" by Martin A. Davis Jr.

In 2002, the board of the Brady Foundation decided to spend down a significant portion of the foundation's corpus through a limited number of major grants "that will have a lasting impact on public policy" and "create a lasting legacy" to honor W.H. Brady's "unwavering faith that 'ideas have consequences.'" Davis looks at how this mid-sized foundation made a lasting impact through its decision to spend down in a big way.

 

John M. Olin Foundation

"The Insider's Guide to Spend Down: Switching Off the Lights at the Olin Foundation" by James Piereson

The long-time executive director of the John M. Olin Foundation discusses both the practical aspects of sunsetting the Olin Foundation and also the foundation’s achievements in its mission to show “what can be accomplished in the world of ideas with relatively modest sums of money.” 

 

A Gift of Freedom: How the John M. Olin Foundation Changed America by John J. Miller

A book-length history of one of America's most prominent term-limited foundations, respected by friend and foe alike for its influence on the nation's intellectual life.

 

"Giving It All Away: Strategies from the Spend-down Experts" by James Piereson and Gara LaMarche

The former heads of two foundations, one spent down and one spending down, discuss their experiences at the 2011 Philanthropy Roundtable Annual Meeting.

 

Julius Rosenwald

"Julius Rosenwald's Crusade: One Donor's Plea to Give While You Live" by Peter M. Ascoli

Rosenwald made a fortune as a Sears, Roebuck executive, underwrote enormous efforts to improve schooling for blacks in the South, and launched a one-man crusade against endowments. On the last issue he had little success, but his personal giving remains a towering achievement in American philanthropy.

 

"The Principles of Public Giving" by Julius Rosenwald

In this essay Rosenwald argues that "while charity tends to do good, perpetual charities tend to do evil," and thus, he encourages donors to resist the desire "to establish an enduring memorial on earth" but instead let their giving be guided by the needs of their present time.

 

Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South by Peter M. Ascoli

The book from which Ascoli's article, "Julius Rosenwald's Crusade," is drawn.

 

You Need a Schoolhouse: Booker T. Washington, Julius Rosenwald, and the Building of Schools for the Segregated South by Stephanie Deutsch

A descendant of Rosenwald recounts the friendship between civil rights leader Booker T. Washington and philanthropist Rosenwald that would lead to the building of 5,000 schoolhouses educating one-third of African Americans in the segregated South of the early 20th century.

 

General Discussions on Spending Down

"Gearing Up to Spend Down: Observations on Foundation Sunsetting" video with Gara LaMarche, Joel Fleishman, and Tony Proscio

Leaders in spend-down planning for the Atlantic Philanthropies and the Avi Chai Foundation discuss their experiences.

 

Perpetuity or Limited Lifespan: How Do Family Foundations Decide? by Foundation Center

Surveys conducted for the Council on Foundations discover the motivations and plans behind foundations' decisions to term limit themselves or exist in perpetuity.

 

"Spend Down Or Act Like It!" by Dave Peery

A family foundation member exhorts donors to consider spending down, or at least to focus giving as carefully as if one were spending down.

 

Sunsetting: A Framework for Foundation Life as well as Death and Foundation Sunset: A Decision-making Guide by Francie Ostrower

In these two reports, released by the Aspen Institute's Program on Philanthropy and Social Innovation, Ostrower surveyed donors, foundation family members, trustees, staff grantees, and archival documents from four sunsetting foundations to glean best practices and lessons that can be applied to other sunsetting, as well as perpetual, foundations.

 

List of Spend-Down Foundations, compiled by Duke University's Sanford School of Public Policy

As part of a project on spend-down, the Center for Strategic Philanthropy and Civil Society has assembled this list of foundations that have spent down or who are known to be actively spending down.

 

"The Insider's Guide to Spend Down: Switching Off the Lights at the Olin Foundation" by James Piereson

The long-time executive director of the John M. Olin Foundation discusses both the practical aspects of sunsetting the Olin Foundation and also the foundation’s achievements in its mission to show “what can be accomplished in the world of ideas with relatively modest sums of money.”

 

"Julius Rosenwald's Crusade" by Peter M. Ascoli

Julius Rosenwald’s grandson recounts his ancestor’s campaign to persuade other donors to term-limit their foundations. Although his funds were spent down 16 years after his death, Rosenwald’s legacy of aid to minority schools, the rural poor, and others, still endures.

 

What Your Money Means: And How to Use It Well by Frank Hanna

A contemporary donor offers his own update of Andrew Carnegie’s argument in “The Gospel of Wealth” to give while you live. Read George Weigel’s review of the book for Philanthropy.