May 30, 2011 | Read Time: 4 minutes
Our family foundation, the French American Charitable Trust, will close later this year. That is by design, but it was not something we even anticipated 20 years ago when our parents created the fund for their five grown children. We came to this decision gradually, when it became clear that we would be more effective making larger grants now than if we spent less over a long time.
Our mission is to help people directly affected by social, economic, and environmental injustice to speak up and promote policy changes that would improve their lives, and we have supported community-led groups to accomplish that goal.
Once we started to dip into our endowment to support that work, we realized we needed to have a formal conversation about the foundation’s life span. We eventually agreed that making the trust the work of a single generation would allow us to accomplish more with the foundation’s money and also to honor our parents in their lifetimes.
To some, our decision to spend everything now might seem incompatible with our commitment to promoting social change, which is a slow process. But with the current generational transfer of wealth, new foundations emerge every day, and I strongly believe that the ones that exist today have a responsibility to be as effective as possible, even if it means deciding to operate for a short time.
We know we are leaving our grantees stronger and in a good position to carry on their work. While it might not be the right choice for every foundation, I’m convinced that our approach made it possible for our fund to make a big difference in a short time, even with a relatively small $40-million endowment.
Here’s why: Spending it all in a set period forces discipline, focus, and a clear strategy.
When we began to think about how to operate in a world in which we were not trying to ensure the foundation’s perpetuity, we had to think more strategically about our priorities and results, and we also became more creative.
We were already providing general operating support to groups that had strong leadership. We continued that aid but we also sought to strengthen the internal backbone of these groups—their management, financial, and program practices—and help them connect with other supporters.
We asked our grantees to tell us what they most needed and designed a mix of management assistance, organizational development, and fund-raising programs that met those needs. As a result, these groups chalked up big gains in their operating budgets, membership, scope of work, and the number of public-policy victories they achieved by changing labor laws, environmental standards, and practices that promote discrimination.
If we had not decided to operate for a limited time, we would not have been able to give as much each year, and that larger amount made a major difference to the success of our grantees.
But for us, giving more was not just about money—it also meant giving more strategically, and doing more to spotlight the work of grantees and open doors with other sources of money.
Of course, spending it all presents challenges. You must plan early, consult your grantees, and communicate so they know what to expect.
It’s not always a smooth ride—it took our family 10 years to reach a consensus about whether to abandon perpetuity as a goal—but the increase in the difference we were able to make and the concrete results we saw with our own eyes made the bumps worth it.
Even though we have been planning the trust’s exit since 2004, it’s still sad to make those last grants.
Mostly, though, we feel in a celebratory mood. We’re enormously proud of what our grantees have accomplished We also helped spin off one of our more effective efforts—a program to help nonprofits strengthen their management and operations—into an independent entity called RoadMAP that will be available to foundations and social-justice organizations on a fee-for-service basis.
Going back to our parents’ original intention, I can say we not only learned about effective philanthropy, we also developed a deep, enduring commitment to work for a more just society, which we hope has set an example for our children. They will find their own ways to make a difference.
