Troy K. Webber, the judge overseeing the probate of Leona Helmsley’s estate, has ruled that “the trustees [of the charitable foundation] may apply trust funds for such charitable purposes and in such amounts as they may, in their sole discretion, determine.” The trustees include Alvin Rosenthal (Helmsley’s brother), Sandor Frankel (her lawyer), John Codey (her friend), and Walter and David Panzirer (her grandsons).
In 2003, Helmsley composed a mission statement for the multibillion-dollar charitable foundation. In that draft, she indicated two philanthropic priorities: helping the indigent and providing care for dogs. A year later, she struck the clause about helping the indigent, leaving only “purposes related to the provision of care for dogs” as a specific guiding principle for the foundation. (Helmsley was famously devoted to her Maltese bitch, Trouble.) She also, however, added a clause allowing “all such other charitable activities as the trustees shall determine.” The mission statement was never formally incorporated into Helmsley’s will or trust documents.
Webber’s ruling was issued on February 19, 2009. On April 21, the trustees announced the first round of grants from the Leona M. and Harry B. Helmsley Charitable Foundation. Of $136 million disbursed, $1 million (roughly 0.7 percent of the total) was directed to canine-related charities. Of that $1 million, $900,000 was directed to various canine-companion programs, while $100,000 was directed to the American Society for the Prevention of Cruelty to Animals.
A recent report by the Urban Institute intends to fill a “gap in the literature on philanthropy” with a study of the “motivations, strategies, and experiences associated with the decision to sunset.” Released in February 2009, the report is based on survey data from over 800 private foundations with varied longevity plans, as well as extensive interviews with 31 foundations that either have considered or plan on termination.
It is sometimes suggested that an increasing number of foundations are deciding to sunset, but the institute’s report does not find substantial evidence to validate the assertion. Among the paper’s more surprising discoveries is the finding that a large number of limited-life foundations do not associate their longevity plans with their overall missions and strategies.
Although a variety of reasons motivate the decision to sunset a foundation, the report finds three broad sets of animating concerns that govern the thinking among donors and trustees as they consider sunsetting:
• In some cases, the choice to sunset is the result of purposeful decision, as when the donor deliberately sets out to undertake a course of “giving while living.”
• In some cases, the choice to sunset is the result of a lack of other options, as when the donor does not feel he or she can find reliable trustees, or is the result of a decidedly negative view of perpetual foundations, as when the donor dislikes institutionalized philanthropy.
• In some cases, the choice to sunset is the result of a concern for donor intent, as when the donor feels that a limited-life foundation will honor his or her wishes, or is the result of wanting to achieve specific charitable outcomes, as when the donor feels that spending more in less time is a way to achieve greater philanthropic impact.
Our interviewees revealed that in a variety of ways, sunsetting often had unanticipated benefits—and drawbacks,” says the report. “Thus, a sunsetting provision introduced to allow ‘giving while living’ and preserve donor intent at one organization later evolved into a sense that sunsetting could permit the foundation to have a greater impact and take greater risks to achieve it. For others, the feeling of freedom to spend according to perception of philanthropic criteria without worrying about the preservation of the foundation as an entity proved a major benefit. Yet another acknowledged that the pressure to spend had resulted in some poor grant decisions.”
We believe that the strategic uses of sunsetting as a philanthropic approach would benefit from further exploration,” the report concludes. “These could then be more fully integrated into donors’ and trustees’ planning from the outset.”
The paper, “Limited Life Foundations: Motivations, Experiences, and Strategies,” was authored by Francie Ostrower, and is available on the Urban Institute’s website, urban.org.
In a recent academic paper, behavioral economists from Duke University, Tel Aviv University, and Columbia University have found intriguing new insights into the dynamics of “image motivation.” Image motivation is a psychological theory which holds that some people are in large part motivated to charity by a desire to appear good to those whose opinions they care about.
The researchers began with a test to determine whether individuals would give more if they knew their contributions to what they perceived as an admirable charity would be made public. Participants in the study were told that the more times they clicked a difficult combination of computer keys, the more would be contributed in their name to the American Red Cross. One group was told the total amount contributed would be made public at the conclusion of the experiment; the other group was told that the information would be kept private. In keeping with the image-motivation theory, the group that was told its contributions would be made public worked much harder, averaging 900 clicks to the other group’s average of 517.
The researchers then added a new variable: monetary incentives. A number of scholars have hypothesized that adding monetary incentives complicates the giving patterns of individuals who are image-motivated. Image-motivated givers, the theory holds, will be less motivated if they think people will perceive their generosity as self-interested.
To test this element of the theory, the researchers announced the introduction of individual monetary rewards, alongside the original charitable contributions, for greater effort. How did the announcement affect the click rate in each group? Among the group whose contribution was made public, the average click rate stayed more or less the same. Among the group whose contribution was kept private, however, the average click rate rose from 517 to 740. Both results further validated the theory: monetary incentives have a muted effect on public giving, while they markedly increase private giving.
The paper, “Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Pro-socially,” was authored by Dan Ariely, Anat Bracha, and Stephan Meier, and appears in the March 2009 issue of the American Economic Review.
The Louvre has established an American-style endowment—the first of its kind among French museums—with €175 million ($230 million). The funds were given as part of an effort to build a satellite museum in Abu Dhabi (scheduled to open in 2012) which will borrow works of art from the Paris campus. The Gulf emirate is slated to donate another €250 million to the endowment by 2027.
To date, the Louvre has relied on the French government for support of its operating costs of roughly €122 million per year. Funds for new acquisitions, renovations, and capital improvements are privately raised, but have never before been held in an endowment.
The museum hopes for an average annual return of 5.5 percent on the endowment, amounting to about €10 million per year, in addition to another €5 to €10 million per year the museum intends to raise from private contributions. It is currently in talks with 18 banks over future management of the endowment. “We need to find patrons interested in attaching their name to the long-term financing of the Louvre,” says the museum’s general administrator, Didier Selles.
[Establishing the endowment] will not be as easy as we thought two or three years ago,” Selles told Bloomberg.com. “The idea is to avoid dilapidating this capital. The government has let us put the money in an endowment because it knows that, ultimately, it will need to contribute less to Louvre projects.”
In the Winter 2009 issue of Philanthropy, Sheri Biller and Yvonne Bell were mistakenly associated with the Sheri and Les B. Family Foundation. They belong to the Sheri and Les Biller Family Foundation. Also, Rachel and Regan Brough were misidentified as Rachel and Regan Brogan. The editors sincerely regret the errors.
