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Sunset Giving Increases as Economy Declines
by Ashley High As the economy continues to spiral downward, more philanthropists are adopting spending deadlines and sunset provisions in order to meet urgent needs. As the Wall Street Journal reports, “by granting the entirety of funds within a certain time, these charitable efforts are looking to have a bigger impact than traditional foundations, which are typically set up to last forever and pay out roughly 5% of assets a year.”
One such organization that has adopted spending deadlines is the Beldon Fund. They are donating an average of $14 million a year, as opposed to the $4 million they would have spent if they were set up to stay in existence forever. The Fund often gives large sums of money to single organizations to better assist those non-profits. The Fund’s founder, John Hunting, said it seemed “unethical to retain money for the future when who know what the future might look like.”
Only 10% of active family foundations are limited-life, but there is more discussion around the idea as the market continues to decline. Some foundations hit by the economy have decided to preserve their capital by not giving. Others are worried that a spend-out model would not preserve their family’s giving legacy. However, those who choose to spend down are saying, “Let the next generation create new philanthropic capital for their own priorities and mission.”
Information taken from: Shelly Banjo. “Philanthropists Set Spending Deadlines.” The Wall Street Journal. <http://online.wsj.com>. Back |
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