May 21, 2007 | Read Time: 1 minute
Holden Karnofsky, a contributor to The GiveWell Blog, wants somebody to explain to him why foundations give out so little of their money.
Using figures from the Foundation Center Yearbook, he calculates that foundations spent 6.6 percent of their $510.5-billion in assets in 2005. “I will be surprised if you can convince me that a world this needy, a charitable sector this underfunded, and $500-billion sitting in savings don’t add up to a broken system and a tragedy for those in need,” he writes.
Mr. Karnofsky, who used to work for a hedge fund, helped start GiveWell, which analyzes the effectiveness of nonprofit groups to help donors decide where to give. He says he doesn’t understand why foundations stay in business any longer than 10 or 20 years.
“Why, honestly, are the Carnegie Corporation and Ford Foundation still around, long past the point where anyone can reasonably claim to represent the founding funders’ wishes? Why are foundations in aggregate giving away money at a pace that indicates they expect to last longer than any U.S. company ever could—indeed, longer than the U.S. itself is likely to?”
If you have answers for Mr. Karnofsky, click on the comments link below this posting.
