Duke Sanford School of Public Policy

For the past two years, the Center has been documenting the process of spend-down at two major foundations. Joel Fleishman has been following events at AVI CHAI and Tony Proscio those at The Atlantic Philanthropies.

The Foundation Center’s 2009 report Perpetuity or Limited Lifespan found that, of the 1,074 family foundations responding to a survey of the 20,000 top foundations, approximately 12 percent plan to spend down while another 25 percent are undecided. If those number hold roughly true for all of the approximately 70,000 family foundations in the United States, we’re talking about there being potentially more than 8,000 foundations that have positively decided to spend down.

For the past three years, I have been chronicling the ongoing process of spend-down at AVI CHAI, a foundation located in Jerusalem and New York with programs in Israel, North America, and the former Soviet Union. The third annual report, titled "Shifting the Spend-Down into High Gear: A Foundation Begins Implementing Its Strategy," is now available.

"Depend upon it, Sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." —Samuel Johnson, as reported by James Boswell in Life of Johnson.

With the publication of the second annual report on spend-down at the AVI CHAI Foundation, Tony Proscio and I have had the opportunity to reflect on some of the lessons that we, as well as the trustees and staff at AVI CHAI, have learned over the first two years of the project.

It has never been easy to explain the practice of philanthropy to the uninitiated. Confusing philanthropy with charity, many people tend to wonder what can be so hard about giving money away.

It wasn’t too long ago that very few philanthropic foundations were designed, or would come to decide, to spend down their endowments and go out of business.