More on time, value, and time limits
A while ago, we collected some thoughts from careful observers of philanthropy — people who either make decisions about how to use charitable wealth or advise those who do — on the value of time-limited giving. Specifically, we asked: Under what conditions could one argue, objectively and convincingly, that giving a large amount over a limited period produces more value for society than giving smaller amounts over a much longer, perhaps indefinite, timespan.
We suggested some formulas that could illustrate (but not literally govern, in any strict, mathematical sense) how a foundation might weigh that kind of choice. We focused on
- the dollars the foundation plans to inject into a field or a community;
- the benefits those dollars are expected to produce directly;
- the risk that those benefits would not, in fact, be produced;
- the possible erosion of the benefits over time;
- improvements in the foundation’s effectiveness or efficiency in making beneficial investments; and
- the ripples that the direct benefits might later cause, essentially as after-effects.
We published the first result of that gathering of the minds here — in a paper that some found enlightening and others saw as forbiddingly theoretical, too hard to translate into the murkier world of real decision-making. The notion that rational, objective criteria might inform a wise choice about time limits, and that the relationships among these criteria could be spelled out in a more analytical way, seemed to enjoy broad support (or at least pique a lot of curiosity). But several readers asked: How would this work in real life?
So here’s one attempt (there ought to be more) to answer that question. This time, we drew examples from three grant programs of The Atlantic Philanthropies, a time-limited institution that has officially completed its grantmaking. In each example, we tried to tease out the variables that featured prominently in our more theoretical discussion, but this time we considered real (or at least plausible) values for those variables and reasoned how those variables interacted in the actual fields and communities where Atlantic worked.
This isn’t dispositive — in fact, we made no attempt to “prove,” one way or another, that time limits are inherently good or bad. The goal was merely to create a more orderly, logical, and objective way for any foundation to think about the question and weigh the complex interactions of time, money, and value. The choice of a time horizon — either for a foundation’s own lifetime or for the intended lifespan of its projects or lines of work — is arguably one of the most important, and yet one of the least analyzed, decisions a foundation can make.
The goal here is not to settle anything, but to start a discussion. Replies, rebuttals, or other commentary are more than welcome. We’ll gladly share on this site whatever we learn.