A growing number of philanthropists are adopting spending deadlines and sunset provisions for their foundations to ensure that global needs are addressed in a timely way, the Wall Street Journal reports.
By giving away the bulk of their funds within a set period of time, these foundations hope to make more of an impact in the short term than foundations that have been established in perpetuity and only have to pay out 5 percent of assets annually. "There are such pressing needs now, from climate change to the escalating economic challenges facing our communities [that] we need to get focused and step up in a big way," said Jennifer Buffett, president of the NoVo Foundation, which works to empower women and girls.
This month, for example, the Beldon Fund, a New York City-based environmental policy foundation, will close its doors a little more than ten years after it received a gift of $100 million from its founder John Hunting to build a national consensus to achieve and sustain a healthy planet. Rather than spend $4 million a year to that end as a foundation established in perpetuity, Beldon awarded an average of $14 million a year during its final decade. To accelerate the efforts of its grantees, the fund gave large amounts to single causes such as the Minnesota Environmental Partnership, which grew from a small informal hub in 2000 to an influential statewide umbrella organization that advocated successfully at the state level for the country's first ban on phosphorous pollution.
A recent study by the Foundation Center found that limited-life foundations represent a bit more than 10 percent of active family foundations. According to Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, those who choose to spend down are saying, "Let the next generation create new philanthropic capital for their own priorities and mission."