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April 2, 2012

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.

If these foundations do indeed spend down, hundreds of millions of dollars will be released into the sector above and beyond what would be spent were the foundations to stick to the minimum 5% pay-out that perpetual foundations generally adhere to. With another 17,000 or so foundations at least considering spending down (again, if the Foundation Center’s numbers hold true for all family foundations), the dollar amounts may be truly gargantuan.

As part of the Center’s spend-down project, we have assembled a library of online documents pertaining to spend-down, as well as a list of foundations that have spent down or have publicly announced their intention to do so. A couple of things stand out about these assemblages.

First, the amount of serious research into spend-down foundations, whether retrospective or conducted in real time, is surprisingly small. In addition to our own modest efforts with Atlantic and AVI CHAI, Francie Ostrower at the University of Texas has done important work, and a few foundations, such as the Whitaker Foundation, the Lucille P. Markey Charitable Trust, and (especially) the Beldon Fund, have documented their spend-down processes. The vast majority of foundations that spend down do so silently—their experiences unrecorded, whatever lessons they may have learned lost.

Second, given that there are, potentially, thousands of foundations out there that are planning to spend down, the fact that we at the Center have been able to identify only about two dozen of them speaks to the taciturnity with which most sunsetting foundations go about their business.
In early June, the Center will be hosting a gathering of sunsetting foundations in Washington, D.C. The meeting will be designed to encourage participants to exchange views with one another and focus on questions that interest them, in relatively informal, open conversations. (We don’t envision any lengthy presentations.)

We’ll start on the evening of June 6 with cocktails and dinner at 5:30 p.m., including a brief talk by and discussion with Vincent McGee, former CEO of the Aaron Diamond Foundation, under whose leadership the institution successfully spent down. We’ll resume the next morning with breakfast at 8 and a working session from 8:30 to 3, including a break for lunch. By the end of the meeting, we hope to ascertain whether a spend-down interest group should meet regularly, and if so, how and when—regionally? nationally? annually or semiannually? Follow-up issues, like the agenda itself, will be discussed when me meet, and will be settled in whatever way is most helpful to the participants.
Which leads me to the main point of this post:

If you are a senior officer at a foundation that has committed to spending down, is actively debating spending down, or has already closed, we would like to extend an invitation to you to attend this meeting in Washington in early June.

If this invitation doesn’t apply to you, but you know someone to whom it may apply, please pass it along.
Potential participants are encouraged to contact me, Edward Skloot,, or my program coordinator, Mary Collins, We look forward to seeing you in D.C.!

Edward Skloot