The pandemic and other global challenges are prompting a growing number of newly created foundations around the world to accelerate their grant making to give more now rather than what most foundations do: try to live forever, according to a new survey.
Nearly three-quarters of foundations plan to exist in perpetuity, the survey found. But more than one-third of foundations established after 2010 plan to spend all of their assets by a specific time. That compares with the 7 percent of foundations created in the 1990s with the goal of operating for just a set period of time.
Half of the foundations said that Covid and other global challenges of 2020 and 2021 prompted them to consider or take action that could hurt their ability to exist forever. Thirty-four percent said they sped more grant money out the door but planned to slow down so they could keep operating for a long time. But 15 percent said they were either actively considering or had already decided to empty their endowments.
Among North American foundations, 44 percent said they increased grants in 2020 and 2021, and 9 percent are considering plans to distribute all their assets by a set date.
The global survey, conducted by Rockefeller Philanthropy Advisors from June to December 2021, does not claim to provide a definitive view of foundation practices. Instead, said Renee Karibi-Whyte, senior vice president, it is a “snapshot” of grant-making plans at the 150 foundations from 30 countries that responded.
Karibi-Whyte predicted that more foundations will follow the lead of Bill Gates, who last week put $20 billion into the Bill & Melinda Gates Foundation. Rather than hold on to their wealth to deal with crises, Gates urged his fellow billionaires to pour money into imminent threats like the pandemic and climate change.
“As more and more people see that this is something that some of the bigger foundations are doing, as you saw with the Gates Foundation, more people are going to be looking at it,” said Karibi-Whyte.
The survey found that grant-maker founders and boards of directors had the most influence on the decision whether to spend everything soon or operate forever. But Karibi-Whyte predicted that staff, outside advisers, and grantees may wield more influence in the future based on the “hunger” she sees among foundation leaders to learn from people outside the boardroom.
The survey also found:
- Education and community and economic development were the top two grant-making priorities listed both by foundations that plan to exist well into the future and by those with a time limit.
- Giving to political, civil, and human rights was in the top five grant-making priorities among all foundations, regardless of the time horizon they had chosen. Those issues did not appear in the top five areas of focus when Rockefeller Philanthropy Advisors conducted a similar survey two years ago.
- 43 percent of foundations that planned to distribute all their assets in a set time said they wanted to make a bigger difference by narrowing their support to a few priorities. That often meant stopping grants to certain causes or to specific geographic areas or groups of people.
- One-third said they wanted to realize social gains within a founder’s lifetime, and 14 percent believed future generations would either not share the founder’s interest in philanthropy or would steer the foundation in ways contrary to the donor’s intent.
