JULY 1 51 7, 20 1 9 | CLEVELAND Time-Limited Philanthropy: What - - PowerPoint PPT Presentation

JULY 1 5–1 7, 20 1 9 | CLEVELAND

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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

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

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.

• 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

Rockefeller Philanthropy Advisors

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Current Time Horizon Research

• 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 Purpose

• 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.

Rockefeller Philanthropy Advisors

Time Horizon: Definitions

GIVING WHILE LIVING DEFINED ENDPOINT IN PERPETUITY

Rockefeller Philanthropy Advisors

Time Horizon: Key Considerations

Defined Endpoint In Perpetuity Giving While Living

Advantages:

• Personal involvement
• Donor intent preserved
• Fast deployment
• Urgent needs
• Big bets, big payoff

Drawbacks:

• Complex timing, planning
• Harder to collaborate
• Reduces flexibility
• Favors big, established

nonprofits Advantages:

• Clear goals and timeline
• Tied to issue, not donor
• Can define legacy
• Good for collaboration
• Focus on goals, not tactics

Drawbacks:

• Underestimating challenge
• Artificial deadlines
• Complex management
• Difficult to adjust to economic

changes Advantages:

• Allows for evolution
• Greater total giving
• Forms “capital market” for

the nonprofit sector

• Supports long-term efforts

Drawbacks:

• Drifting donor intent
• Institutions can calcify
• Dwindling capital
• Difficulties with succession
• r governance

What’s in a Name?

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Rockefeller Philanthropy Advisors 10

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)

Rockefeller Philanthropy Advisors 11

RPA Survey: Participant Demographics

6% Asia 8% Europe 76%

• N. America

10%

• S. America

HQ Location by World Region

35% 16% 10% 39%

HQ Location: US by Region

Northeast Midwest South West

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RPA Survey: Global Time Horizon Distribution Snapshot

71% 8% 21%

Perpetual Considering switch to time-limited (TL) Time-limited

Rockefeller Philanthropy Advisors 13

RPA Survey: US Time Horizon Distribution Snapshot

74% 7% 19%

Perpetual Considering switch to time-limited (TL) Time-limited

Rockefeller Philanthropy Advisors 14

RPA Survey Key Findings:

Certain Program Areas Skew Toward Time-Limited

Time-Limited

• 1. Environment/Conservation
• 2. Education
• 3. Community and Economic

Development

• 4. Health
• 5. Arts and Culture

In-Perpetuity

• 1. Education
• 2. Health
• 3. Arts and Culture
• 4. Community and Economic

Development

• 5. Environment/Conservation

Considering

• 1. Health
• 2. Community and Economic

Development

• 3. Education
• 4. Arts and Culture
• 5. Environment/Conservation

Rockefeller Philanthropy Advisors 15

RPA Survey Key Findings:

Time-Limited Model is Trending Up

0% 10% 20% 30% 40% 50% 60% 5 10 15 20 25 30 35 40 45 Pre-1959 1950s 1960s 1970s 1980s 1990s 2000s 2010s

Number of Organizations

Organization’s Lifespan by Establishment Period

Perpetual Considering switch to TL Time-limited Percentage of time-limited foundations

Rockefeller Philanthropy Advisors 16

RPA Survey Key Findings:

Almost 30% Proactively Chose Limited Live Over In-Perpetuity

8 1 3 12 2 2 1 3 8 2 2 4 8 22 5 6 23 56 8 2 5 7 22 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% West South Midwest Northeast All the US

Has the US foundation considered shifting to a time-limited model?

Established as TL Shifted to TL Considering shift to TL Not considered shift to TL Decided not to shift to TL

Rockefeller Philanthropy Advisors 17

RPA Survey Key Findings:

Top Reasons for Choosing or Rejecting the Time-Limited Model

Five Main Reasons for Adopting Time-Limited

• 1. Desire to transfer more of founder’s wealth to

charitable giving sooner

• 2. Desire to make greater impact by narrowing focus
• 3. Desire to see impact on beneficiaries during

founder’s lifetime

• 4. Concern that future foundation activities would no

align with donor’s original intent

• 5. Concern that future generations of family may not

want to be involved in the philanthropic activities Five Main Reasons for Rejecting Time-Limited

• 1. Desire to make impact on beneficiaries over

multiple generations

• 2. Desire to engage future generations of family in

philanthropic activities

• 3. Desire to make greater impact by avoiding narrow

focus

• 4. Prohibited by founding documents or founder
• 5. An expected increase in financial resources in

future years

Trends 2020: National Survey of 500+ Family Foundations

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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%

Has your family decided to limit the life of the foundation?

Examples: S.D. Bechtel, Jr. Foundation

YEAR ESTABLISHED: 1957 SPEND DOWN DECISION: 2009 SPEND-DOWN DATE: 2020 GENERATION MAKING DECISION: 1st Generation, Founder 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 GENERATION MAKING DECISION: 2nd generation 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 GENERATION MAKING DECISION: 2nd and 3rd Gen 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

Examples: Irwin Sweeney Miller Foundation

YEAR ESTABLISHED: 1952 SPEND DOWN DECISION: 2005 SPEND-DOWN DATE: 2010 GENERATION MAKING DECISION: 3rd generation LOCATION: Columbus, Indiana ASSETS (AT PEAK): $25 million NUMBER OF STAFF: 2 REASONS FOR SPEND DOWN: Geographic dispersion; place-based impact WEBSITE: n/a

Examples: Orfalea Family Foundation

YEAR ESTABLISHED: 1970 SPEND DOWN DECISION: 2012 SPEND-DOWN DATE: 2022 GENERATION MAKING DECISION: 2nd and 3rd Gen 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.orfaleafoundation.org

Examples: Chorus Foundation

YEAR ESTABLISHED: 2007 SPEND DOWN DECISION: 2013 SPEND-DOWN DATE: 2024 GENERATION MAKING DECISION: Donor LOCATION: Eastern Kentucky; Alaska; Buffalo, New York; and Richmond, California ASSETS (AT PEAK): $9.8 million NUMBER OF STAFF: 0 full-time REASONS FOR SPEND DOWN: Donor intent and impact on field (climate crisis) WEBSITE: www.chorusfoundation.org

Rockefeller Philanthropy Advisors

Time-limited organizations

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RPA Survey

High Level of Satisfaction with Chosen Time Horizon

77% 20% 3% 79% 14% 7% 78% 18% 4%

Perpetual organizations that considered but decided against time- limited model Perpetual organizations that have not considered time- limited models Time-limited organizations Level of Satisfaction with Selected Time Horizon

Rockefeller Philanthropy Advisors 28

RPA Survey

Time-Limited Foundations Believe Model Boosts Effectiveness

2 4 6 8 10 12 14 16 18

Our organization dedicates more financial resources to its focus areas than it did before Our organization limits grantmaking to a particular geographic area or issue/topic area Our organization works with greater urgency than it did before Our organization works more closely with grantees and communities than it did before

Strategic Lifespan Peer Network: Strategies Poll

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Sustaining grantees & collaborations with governance & capacity 70% Spending completely vs. Legacy grants determine by individual board members 40% Altering giving strategy & impact on current endeavors/programs 40% Spend all assets vs. Leaving DAF (for next generations to manage) 30% Folding in organizations with long-term plans/programs 30% Place-based challenges 20% Exiting large scale initiatives/efforts while foundation continues 20% Determining & establishing legacy, brand & impact focus 20% Documenting lessons learned for field, grantees, others 20% Setting up organizational structures for a community to assume assets 0%

Strategic Lifespan Peer Network: Tactics Poll

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Managing messaging & communication efforts 60% Tailoring spend out approaches 50% Engaging the board to decision points 40% Establishing timeline & checklists 40% Human resources planning 30% Organizational culture, internal & external 20% Narrowing focus: by geography, grant type, topic, grantee, etc. 20% Transparency with grantees & compliance 20% After closure remnants & file storage 20% Outlining conditions & factors to trigger determination 10%

Rockefeller Philanthropy Advisors

Time Limited Giving in Real Life: Insights from the Field

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• Planning, planning and more planning
• Reassessing and reevaluating
• Homing in on legacy
• Playing well with others
• Taking care of grantees
• Learning, applying and externalizing lessons

Rockefeller Philanthropy Advisors

Key Takeaways for PSOs

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• Time-limited philanthropy is a growing trend
• Members will see more information and engagement with peers
• Many models can work: no one size fits all solutions
• Need for convenings and peer learning cohorts
• Time horizon should be part of strategic planning discussions

Strategic Lifespan: Supporting and Advising Funders

• 1. Facilitating the decision
• 2. Aligning focus with opportunity

and scale of resources

• 3. Encouraging All-Way

Communication

• 4. Ensuring durable impact

strong fields resilient organization knowledge-building

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• 5. Developing and supporting

talent

• 6. Change management
• 7. Exiting grantee relationships

responsibly

NCFP Resources

• Case Studies
• Trends 2020 Research and Focus Brief
• Strategic Lifespan Peer Network
• 2020 Retreats

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NCFP Knowledge Center

Passages Issue Briefs. Webinars. Content Collection:

Ending Well: Exits and Spend Down

https://www.ncfp.org/collection/ending-well/

CEP: A Date Certain: Lessons Learned from Limited Life Foundations GEO: What Does it Take to Spend Down Successfully? The Foundation Review, Exit Strategies, including “Breaking Up Is Hard To Do” and “End-Game Evaluation” Vol 9, Issue 1

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Rockefeller Philanthropy Advisors

Resources and Upcoming Publications: Summer/Fall 2019

Time Horizon Guide

A strategic, practical donor guide on time horizon insights and considerations

Two Time Horizon Survey Reports

Formal survey reports on the main finding concerning time horizons in institutional and individual philanthropy

New Case Studies

A compilation of stories of foundations on their spend-down journeys to advance sector knowledge and peer learning

For More Information Please visit: www.rockpa.org/resources/ or Email: otarasov@rockpa.org

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Thank You

• What’s Next?

̶ 3:15 - 3:45 pm, Networking Break & Bookstore, 6th Floor Foyer near Orchid Ballroom ̶ 3:45 - 5:15 pm, Concurrent Sessions

• Advancing Racial Equity in Philanthropy Workshop Part 2, Vanda North and South (6th Floor)
• REDI Consultants: How to Find Them, Engage Them and Manage the Relationship, Stanhopea (7th Floor)
• Opportunity Zones, Impact Investing and Loan Guarantees: What is the Role for PSOs?, Caladenia (7th Floor)
• Session 4: The PSO Field Guide to Partnership and Collaboration, Calypso (6th Floor)
• Think Tank: Philanthropy in the Digital Age, Cattleya (6th Floor)