Dear Colleagues,
In 2009, the Foundation made a momentous decision to spend down. It was thoughtfully considered and made good sense given the timeliness of the issues our Founder most wanted to address. The decision to spend down meant that more could be invested in solutions over a shorter period of time, making it possible to contemplate big wins with a decade of concerted effort. The decision had the ancillary impact of thrusting the Foundation into the limelight as one of the biggest foundation spend downs to date.
In 2015, the Foundation put $120 million to work, mostly related to big systems-change goals. This is more than five times the annual commitments made prior to the decision to spend down. The work is both challenging and exhilarating. But there is no map or handbook to guide us. We are striving to learn from the experience and views of others every step along the way. We are also making a commitment to share what we learn from our own experience, and to build knowledge for the field of philanthropy more generally concerning exits and spend downs.
In fact, much is being written of late about foundation spend downs. Organizations like the Center for Effective Philanthropy (CEP), Grantmakers for Effective Organizations (GEO), and the Foundation Center – all of which provide high-quality resources on foundation effectiveness and operations – are beginning to offer insights on exits and spend downs. GEO recently published a short paper titled, “What Does it Take to Spend Down Successfully?” The paper is based on in-depth interviews with foundations that are spending down – including our own.
The Beldon Fund, the Atlantic Philanthropies, the Avi Chai Foundation, the Andrea and Charles Bronfman Philanthropies, and the Mary Flagler Cary Charitable Trust are among the foundations that are documenting their spend-down process through commissioned studies, internal reports, and/or blog posts. And the Robert Wood Johnson Foundation offers high-quality reports regarding their efforts at building and exiting fields.
However, most of the material published to date[1] is from foundations’ perspectives on their own experience. Foundation exits occur with ubiquity, and the trend toward spending down, or “giving while living,” is on the upswing. Any research into these issues that is rigorous, comparative across foundations, and that takes into account multiple perspectives (e.g., grantees and funder partners as well as the foundations themselves) could add enormous value to the discussion and provide guidance for those who are still among the pioneers in foundation spend downs.
Given the trajectory to sunset in 2020 – and our Founder’s admonition to go beyond the grant to offer value and ensure accountability – one of the obvious ways the Foundation can add value will be through the knowledge left behind so that others can continue the work and build on the Foundation’s investments, experience, and lessons learned.
To that end, the Foundation is sponsoring modest grants to build knowledge and perspective on foundation exits and spend downs:
- The Foundation awarded $250,000 over two years to The Center for Effective Philanthropy (CEP) to support an initiative focused on foundation operational benchmarking. CEP is building a comparative data set and publishing reports on foundation operations, assessing links between foundation operations and effectiveness for both limited life and perpetual foundations. This initiative will include a set of rigorous, comparative case studies of limited life foundations.
- The Foundation joined with the Atlantic Philanthropies and the David and Lucile Packard Foundation to support a special-themed issue of The Foundation Review focused on exits and spend downs. This issue of the well-regarded peer-reviewed journal will begin to fill in some of the gaps in current understanding about foundation exits and set the stage for further research.
Finally, as we approach the Foundation’s sunset in 2020, the Foundation is considering a post hoc review of the spend down so that others may learn about the consequences of our exit as well as the results of the Foundation’s years of investment in organizations and fields.
Sincerely,
Lauren B. Dachs
[1] In July 2015, the Foundation Center completed a literature review for the Atlantic Philanthropies and the Center for Strategic Philanthropy and Civil Society at Duke University’s Sanford School for Public Policy.