Perpetuity or limited lifespan: how do family foundations decide?
From PhilanthropyWiki
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Jointly produced by the Foundation Center and the Council on Foundations in the USA, 'Perpetuity or Limited Lifespan: How Do Family Foundations Decide?' reports on the first large-scale study of the lifespan plans of family foundations. Based on a survey conducted in June 2008, the report benchmarks the intentions, practices, and attitudes of over one thousand US family foundations, and sheds light on their likely future behaviour as this large and still young segment of philanthropy matures.
In particular it looks at the reasons behind decision to establish (or convert to) a limited-life foundation (ie. with a 'sunset clause' which specifies when the foundation will spend-down and close.)
The research was in part "spurred by the heightened visibility of individual philanthropists who have announced their intention to limit their foundation’s lifespan and by the fact that many family foundations created in the 1980s and 1990s are now facing a transition in leadership".
Key finding are that:
- While perpetuity is the norm for most existing family foundations, 12% plan to have a limited lifespan and 25% are undecided.
- Having a living donor is an especially strong determinant of lifespan planning choices: foundations with a living founder are three times more likely to expect to spend down than those whose founder is deceased, and they are almost twice as likely to be undecided.