Why One Charity Chose to Wind Down While Still Flush With Cash

After 16 years of promoting well-being at nonprofits and government agencies that deliver social services, the Full Frame Initiative closed in June. Or did it?

Katya Fels Smyth, the charity’s founder and chief executive, almost seems unsure herself — she switches between the past and present tense when discussing the charity’s work. Nineteen “stewards” — long-time collaborators who received cash stipends when the organization closed — will continue to promote the approach pioneered by the charity for at least the next 18 months. And the charity’s website will exist for at least another eight years — with a fuller list of free resources and research than it offered to the public when the charity was operating.

At Full Frame, the charity is dead, but the mission lives on. The nonprofit’s experience could serve as a model for other struggling organizations that are considering winding down.

Smyth is among a group of experts trying to encourage more openness to dissolution among both charity executives and donors. For too long, these experts say, the modus operandi in the nonprofit world has been to try to survive at all costs — and then seek a merger partner if things go south. The third option, winding down, is so unthinkable that many charities don’t even explore what a closure would look like in their scenario planning.

“I’m not trying to be the angel of death,” Smyth says. “It’s really about recognizing that mission and organization are not the same thing — yet they get conflated so easily.”

This year’s challenges have prompted consulting firms and foundations to talk more openly about wind-downs. Nonprofit GPS, an effort to be unveiled next week by the Nonprofit Financial Commons and BDO’s Nonprofit and Grantmaker Advisory practice, will offer free support to struggling charities, including providing advice about wind-downs and closures. SeaChange Capital Partners, an organization that helps nonprofits facing complex financial challenges, works with a group of New York funders that has supported mergers for years. This year, for the first time, that group is committing some funds to help charities wind down.

“People in polite society are increasingly willing to talk about wind-downs as something that needs to be considered,” says John MacIntosh, SeaChange’s managing partner, “especially when we can make the case that the financial support will help the leadership wind down in a way that’s better.”

‘Feeling More and More Fragile’

Full Frame was born from another charity that Smyth founded 30 years ago — On the Rise, a Cambridge, Mass., organization that supports homeless women and is still going strong. Smyth realized that instead of finding solutions to isolated problems that the women might have, the charity needed an approach that focused on their overall well-being — including broad needs such as safety, mattering, stability, and connectedness.

After being incubated at On the Rise, Full Frame split off in 2007 and became a charity in 2009. Since then, it has worked with large systems to reorient their approaches toward an emphasis on client and employee well-being. Recent engagements include working with city planners in Austin and Cleveland, the juvenile justice system in Missouri, and the child-welfare program at the Annie E. Casey Foundation, among others.

Along the way, the charity won the support of prominent foundations and donors. The Robert Wood Johnson Foundation and the Kresge Foundation provided significant grants to Full Frame, and the billionaire Gund family was among the charity’s loyal long-term supporters.

The charity had secured $6 million for a growth initiative in 2020 when the pandemic hit. Philanthropic support, which typically accounted for about 80 percent of the charity’s budget, dropped as the charity struggled with Zoom-based fundraising.

Then things got worse. Fundraising was weak in 2023, and private support dropped even further in 2024, leaving the charity ever more dependent on a narrow base of big donors.

“We were feeling more and more fragile,” Smyth says.

Full Frame still had $1.6 million on the balance sheet last summer, and plenty of demand for its work, but the financial outlook was grim. Then one of three members of the executive team left with only a few weeks’ notice, creating a human-capacity hole that Smyth and the board knew would be difficult to fill.

By the fall of 2024, Full Frame’s budget was down to $3 million from a peak above $4 million. The charity was doing all it could to save money — including not replacing frontline workers who left voluntarily.

Smyth saw four possible scenarios. The one she dreaded the most was an implosion à la Benefits Data Trust, which closed in the summer of 2024, leaving clients in the lurch, despite having received a huge gift from MacKenzie Scott. That scenario seemed unlikely — but possible if one or more of Full Frame’s few remaining major donors pulled out.

The second option was to struggle onward, with the smaller staff taking on the additional work of departing employees and Smyth spending most of her time fundraising. The third option was to find a merger partner, perhaps another charity focused on movement building and systems change. Smyth and the board looked at options but ultimately decided none were the right fit.

For Smyth, the fourth option made the most sense — wind down, get the charity’s research out to the public, and put the ongoing mission in the hands of volunteers.

The board moved quickly, voting in October 2024 for dissolution. Boards have a fiduciary duty to act in the best interests of the organization, but Miki Akimoto, who chaired Full Frame’s board, says she and others took an expansive view of that obligation.

“Obviously we had a fiduciary responsibility for the organization, but we are also fiduciaries for the mission and what it is that we’re trying to accomplish,” says Akimoto, who is also chief impact officer at the National Center for Family Philanthropy. “And if the organization can’t survive in this particular form, then the question becomes what can we do to help preserve the mission?”

‘Stick the Landing’

Smyth hoped to keep the charity’s entire 11-person staff around through late spring 2025 — a goal that she ultimately accomplished along with severance pay that she describes as generous for the nonprofit sector. But she knew she’d need additional funds to give the charity time to wrap up work with existing clients and to establish a plan for keeping the charity’s mission alive.

She went to the charity’s major donors for wind-down support.

“If you’re going to leave well, you need to tie things up,” Smyth says. “That was the message to donors — we need to stick the landing.”

The Gund family and an anonymous donor agreed to provide support quickly, others came through with funds after extensive discussion, and a few said no, Smyth says. Altogether, Full Frame raised just over $1 million for the wind-down.

The Claneil Foundation, which had given Full Frame two three-year grants while it was still operating, chipped in an additional $20,000 for Smyth to document and share takeaways about the wind-down process.

Mailee Walker, Claneil’s executive director, says in her 18 years at the foundation she had never given much thought to the importance of funding that helps a charity make a graceful exit — including keeping ongoing work alive or minimizing harm to the charity’s existing clients as programs fold.

“When Katya was giving me the news, she said this is something that not a lot of foundations understand, and I said, ‘Yes, I’m part of that choir,’” Walker says. “I immediately thought that this is something that would help not only our foundation but the whole sector.”

ZacK Gund says his family had believed in Smyth’s work since she began developing her vision for well-being at On the Rise. The Gunds gave several million dollars over the years to Full Frame, including $800,000 for the wind-down, he says.

He recalls many frank discussions with Smyth as the charity’s fundraising woes deepened. “Foundations are more focused on immediate results,” Gund says. “It got harder for her to get funding. Well-being is really hard to measure on any kind of shorter timescale.”

When she shared the plan to wind down, he urged Smyth to consider ways to preserve the ideas and research the charity had produced. “I work in finance with a lot of private companies,” Gund says. “It comes up a lot — how do you keep and preserve that intellectual property that you developed?”

Gund suggested partnering with a university or foundation.

Instead, the charity turned to 19 people in places where it had worked and who had been strong believers in the well-being framework. Each of these “stewards” received a small financial stipend for agreeing to meet regularly to continue to promote the mission, including tasks like maintaining the website and sharing information about the well-being framework with interested parties.

Another 200 people were invited to become “champions,” helping to support the well-being mission without any compensation. Roughly half — 100 of the invitees — accepted the role.

The stewards now meet remotely about once a month.

“It is unproven — any volunteer effort is a risk,” says Akimoto, who is one of the stewards. “Sometimes they work, sometimes they don’t. But natural leaders are emerging. I’m cautiously optimistic.”

‘Out of the Shadows’

One of the few people focusing exclusively on charity dissolutions is Camille Acey, a self-described “conscious closures consultant” who runs a website called the Wind Down.

“I’m trying to bring closures out of the shadows,” Acey says. “We need a lot more stories like Katya’s and a lot more bread crumbs.”

Smyth will be interviewed by Acey on the Wind Down in October. Also in October, Smyth, Akimoto, and Walker will present on closures at the National Center for Family Philanthropy’s leadership retreat in California.

“Do I wish we hadn’t had to wind down? Yes.” Smyth says. “Do I think it was the right thing to do? Holy moly, absolutely.”