#FORUMCON1 9 JULY 1 5–1 7, 20 1 9 | CLEVELAND
Time-Limited Philanthropy: What the Research Tells Us About This Growing Trend Jason Born , Vice President for Programs, National Center for Family Philanthropy Barbara Kibbe , Director, S. D. Bechtel, Jr. Foundation Renee Karibi-Whyte , Vice President And Assistant Corporate Secretary Olga Tarasov , Director, Knowledge Development, Rockefeller Philanthropy Advisors, @OlgaTarasov #FORUMCON19
Rockefeller Philanthropy Advisors Our Story Our Heritage: • Began with John D. Rockefeller, Sr., in 1891 • Managing philanthropy through a business lens for strategy and measurable outcomes Our Organization: • Facilitated over $3 billion in gifts since our start in 2002 • Currently serving over 150 donors facilitating an average of $200 million in annual giving in more than 30 countries • Core staff of 50+ in NYC, California, Chicago and London
Rockefeller Philanthropy Advisors Research and Knowledge Development Current Initiatives • Theory of the Foundation • Time Horizon in Giving • SDG Philanthropy Platform • Scaling Solutions • Impact Investing As the leading philanthropic advisory service, we constantly engage with emerging topics to drive innovation and advance the field of philanthropy.
Rockefeller Philanthropy Advisors Time Horizon Initiative Overview 10+ years of engagement with the topic Donor guides, curriculum, work on The Giving Pledge, and other sector research 40+ foundations and strategic partners globally Global multi-year donor education and peer learning campaign Convenings, research, publications and new case studies To achieve greater impact, it is vital for foundations to periodically re-examine their philanthropic time horizons and assess related implications for strategic objectives, operating models and approaches.
Rockefeller Philanthropy Advisors Current Time Horizon Research Purpose • Exploration of dimensions of different time horizons in institutional and individual philanthropy. • Considerations, motivations and models that inform philanthropic timeframes. • Effects of time horizons on operating and strategic choices . • Perceived comparative advantages and challenges of different time horizons. Process • In-depth review of existing sources on time-limited giving. • Social media landscape analysis exploring attitudes towards time horizons in philanthropy. • Two surveys with hundreds of respondents from independent foundations and family offices. • 20+ interviews with leading foundations in the United States, Europe, and Australia. 6
Rockefeller Philanthropy Advisors Time Horizon: Definitions GIVING WHILE LIVING DEFINED ENDPOINT IN PERPETUITY
Rockefeller Philanthropy Advisors Time Horizon: Key Considerations Giving While Living Defined Endpoint In Perpetuity Advantages: Advantages: Advantages: • Personal involvement • Clear goals and timeline • Allows for evolution • Donor intent preserved • Tied to issue, not donor • Greater total giving • Fast deployment • Can define legacy • Forms “capital market” for • Urgent needs • Good for collaboration the nonprofit sector • Big bets, big payoff • Focus on goals, not tactics • Supports long-term efforts Drawbacks: Drawbacks: Drawbacks: • Complex timing, planning • Underestimating challenge • Drifting donor intent • Harder to collaborate • Artificial deadlines • Institutions can calcify • Reduces flexibility • Complex management • Dwindling capital • Favors big, established • Difficult to adjust to economic • Difficulties with succession nonprofits changes or governance
What’s in a Name? 9
Rockefeller Philanthropy Advisors RPA Survey of Philanthropic Time Horizons What • How donors view and approach time horizons • Exploration of time-limited and in-perpetuity models • Effects on operating and strategic choices, and decision making Who • 150 private foundations Partners • United Philanthropy Forum (US) • Association of Charitable Foundations (UK) • Dasra (India) • European Venture Philanthropy Association (Europe) • Center for Philanthropy and Social Investments (Chile) 10
Rockefeller Philanthropy Advisors RPA Survey: Participant Demographics HQ Location by World Region 6% Asia HQ Location: US by Region 10% 8% S. America Europe 35% 39% Northeast Midwest 16% 10% 76% South N. America West 11
Rockefeller Philanthropy Advisors RPA Survey: Global Time Horizon Distribution Snapshot 21% 8% 71% Perpetual Considering switch to time-limited (TL) Time-limited 12
Rockefeller Philanthropy Advisors RPA Survey: US Time Horizon Distribution Snapshot 19% 7% 74% Perpetual Considering switch to time-limited (TL) Time-limited 13
Rockefeller Philanthropy Advisors RPA Survey Key Findings: Certain Program Areas Skew Toward Time-Limited Time-Limited In-Perpetuity Considering 1. Environment/Conservation 1. Education 1. Health 2. Education 2. Health 2. Community and Economic Development 3. Community and Economic 3. Arts and Culture Development 3. Education 4. Community and Economic 4. Health Development 4. Arts and Culture 5. Arts and Culture 5. Environment/Conservation 5. Environment/Conservation 14
Rockefeller Philanthropy Advisors RPA Survey Key Findings: Time-Limited Model is Trending Up Organization’s Lifespan by Establishment Period 45 60% 40 50% 35 Number of Organizations 30 40% 25 30% 20 15 20% 10 10% 5 0 0% Pre-1959 1950s 1960s 1970s 1980s 1990s 2000s 2010s Perpetual Considering switch to TL Time-limited Percentage of time-limited foundations 15
Rockefeller Philanthropy Advisors RPA Survey Key Findings: Almost 30% Proactively Chose Limited Live Over In-Perpetuity Has the US foundation considered shifting to a time-limited model? All the US 12 8 8 56 22 Northeast 3 4 23 7 Midwest 3 1 2 6 5 South 1 2 5 2 West 8 2 2 22 8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Established as TL Shifted to TL Considering shift to TL Not considered shift to TL Decided not to shift to TL 16
Rockefeller Philanthropy Advisors RPA Survey Key Findings: Top Reasons for Choosing or Rejecting the Time-Limited Model Five Main Reasons for Adopting Time-Limited Five Main Reasons for Rejecting Time-Limited 1. Desire to transfer more of founder’s wealth to 1. Desire to make impact on beneficiaries over charitable giving sooner multiple generations 2. Desire to make greater impact by narrowing focus 2. Desire to engage future generations of family in philanthropic activities 3. Desire to see impact on beneficiaries during founder’s lifetime 3. Desire to make greater impact by avoiding narrow focus 4. Concern that future foundation activities would no align with donor’s original intent 4. Prohibited by founding documents or founder 5. Concern that future generations of family may not 5. An expected increase in financial resources in want to be involved in the philanthropic activities future years 17
Trends 2020 : National Survey of 500+ Family Foundations Has your family decided to limit the life of the foundation? Yes 9% No, but we revisit this question periodically 18% No, we decided to operate in perpetuity 28% No, we have not made a decision at this time 45% 18
Examples: S.D. Bechtel, Jr. Foundation YEAR ESTABLISHED: 1957 SPEND DOWN DECISION: 2009 SPEND-DOWN DATE: 2020 1 st Generation, Founder GENERATION MAKING DECISION: LOCATION: California ASSETS (AT PEAK): $421 million NUMBER OF STAFF: 35 REASON FOR SPEND DOWN: Accelerated impact on specific, timely challenges WEBSITE: www.sdbjrfoundation.org
Examples: Aaron Diamond Foundation YEAR ESTABLISHED: 1955 SPEND DOWN DECISION: 1984 SPEND-DOWN DATE: 1996 GENERATION MAKING DECISION: Donors LOCATION: New York TOTAL GRANTMAKING: $200+ million over last 10 years NUMBER OF STAFF: 5-10 REASONS FOR SPEND DOWN: Donor intent and impact on field: AIDS research WEBSITE: n/a
Examples: Eckerd Family Foundation YEAR ESTABLISHED: 1998 SPEND DOWN DECISION: 1998 SPEND-DOWN DATE: 2012 (10 years after donor’s deaths) LOCATION: Florida TOTAL GRANTMAKING: $65 million NUMBER OF STAFF: 3 GENERATION MAKING DECISION: Donors REASON FOR SPEND DOWN: Donor intent; impact on field (youth transitioning from foster care & system reform) WEBSITE: n/a
Examples: Quixote Foundation YEAR ESTABLISHED: 1997 SPEND DOWN DECISION 2007 SPEND-DOWN DATE: 2017 2 nd generation GENERATION MAKING DECISION: LOCATION: Seattle ASSETS (AT PEAK): $23.5 million NUMBER OF STAFF: 3 REASONS FOR SPEND DOWN: Impact on field; document/sharing lessons learned WEBSITE: www.quixotefoundation.org
Examples: The John Merck Fund YEAR ESTABLISHED: 1970 SPEND DOWN DECISION: 2012 SPEND-DOWN DATE: 2022 2 nd and 3 rd Gen GENERATION MAKING DECISION: LOCATION: Boston ASSETS (AT PEAK): $47.0 million NUMBER OF STAFF: 4 REASON FOR SPEND DOWN: Immediate impact in areas of clean energy, sustainable food, public health, and developmental disabilities WEBSITE: www.jmfund.org
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