I read with interest that ‘perpetuity vs spend down’ was one of just six topics discussed at the EFC and DAFNE Autumn Assembly on 7 November. Given the ever more urgent and seemingly insuperable challenges faced by the human race – with climate change threatening to become unstoppable and resources dwindling while we all look the other way and try to resolve the global economic crisis – it seems inevitable that philanthropists will increasingly consider whether the spend-down option will allow them to achieve greater impact with their limited resources.
One of the difficulties for philanthropists considering the spend-down option has always been the lack of examples of foundations that have spent down. Now there are a few more. Alliance published an interview with Diane Feeney of the French American Charitable Trust (FACT), which spends down this year, at the beginning of October, and our November interview was with René Olivieri and Sarah Ridley of the UK’s Tubney Charitable Trust, also spending down at the end of 2011.
Interestingly, in their ‘legacy phases’ both FACT and Tubney have focused almost exclusively on building the capacity of key organizations. What would it be like to be in legacy mode all the time, I asked Olivieri and Ridley. ‘I think it would mean having much longer time horizons,’ said Olivieri, ‘and not being so focused on specific projects’ short-term outcomes, risks and returns. You need to realize that you only live on through other organizations, not through individual projects. … We needed to take risks, understand and trust these organizations. We needed to find out what they thought was important, not what we thought.’
In the coming years we plan to feature interviews focusing on other prominent foundations that are spending down, including the Diana, Princess of Wales Memorial Fund, due to close by the end of 2012, and Ireland’s One Foundation, closing in 2013.
Caroline Hartnell is editor of Alliance magazine.