More Philanthropists Choosing to Spend Foundation Funds

A Wall Street Journal article provides insight from financial advisers and giving experts about the growing phenomenon of philanthropists opting to fully spend their family foundations’ assets during their lifetimes.

Nearly a quarter of the collective assets of the country’s 50 biggest foundations were held by “spend-downs” in 2010, compared to 5 percent 50 years ago, according to the Bridgespan Group, a philanthropy consulting firm.

“It’s a significant shift. For many decades, donors setting up foundations just assumed they’d be around forever,” said Melissa Berman, CEO of Rockefeller Philanthropy Advisors.

Exports say decisions to wind down a foundation often spring from family issues—such as heirs uninterested in carrying on management of their parents’ charities—or from wealthy donors’ desire to make the biggest possible impact on chosen causes before they die. They also offer advice in the article in avoiding pitfalls in spending down charity funds.

Read a Chronicle of Philanthropy interview with the leaders of two large foundations that are spending down their funds.