Interest in Spend-Down Philanthropy Surges Among Wealthy Families

Interest in spend-down philanthropy among wealthy donors is surging, although the perpetuity model remains more popular, according to a new report.

The report, from Rockefeller Philanthropy Advisors and Campden Wealth, which surveyed 201 families with net wealth of at least $100 million, also found that education and health were the most popular causes.

Donors who use time-limited philanthropy represented 32 percent of the sample. When asked when they first started thinking about that approach, nearly two-thirds said they had done so within the previous two decades.

“Time-limited philanthropy is a growing trend that is here to stay,” the report states.

One example cited in the report is the Robina Foundation, headquartered in Minneapolis. It was established in 2004 by the businessman and investor James Binger with a $150 million endowment that was to be spent down in 20 years. The spend-down requirement allowed the foundation to have a big impact by directing large sums of money to a handful of projects.

Kathleen Blatz, chairwoman of the foundation’s board, says such an approach is ideal for wealthy families who don’t have enough money to establish a “classic foundation.”

“You can punch above your weight, concentrating your resources on a limited number of beneficiaries and areas, with much more impact and influence,” Blatz says.

However, “perpetuity” foundations remain more popular, with 62 percent of respondents having chosen that approach, according to the report.