Foundation Life Spans Debated

A growing number of foundation donors are shunning the idea that their organizations should operate forever, notes The Wall Street Journal.

Since the 1990s, donors have become more likely to set a time limit for spending all of their foundation’s assets, according to a study by the Foundation Center, a New York-based research center. That is a marked departure from the way donors used to operate, setting up institutions like the Ford and Rockefeller Foundations with the goal that they would give money away forever.

Even though the idea of setting a shut-down period is growing in popularity, only about 10 percent of the nation’s 68,000 foundations have such a policy, says Daniel M. Schley, of Foundation Source, a Fairfield, Conn., company that provides administrative service to private foundations.

While some donors see short-term foundations as a good way to put a lot of money into specific causes and avoid building big bureaucratic grant-making institutions, some philanthropy experts say they hope donors will not lose sight of the value of foundations that operate in perpetuity.

Social problems like poverty or inequities in education require years of attention, they argue, and spending a large amount of money quickly can lead to wasteful spending. (A paid subscription is require to view this article.).