Since 2010, there has been a significant shift toward creating foundations that have a defined endpoint. According to one estimate, about 19% of family foundations established between 2010 and 2014 plan to spend out their endowments, compared to only 3% of those created before 1970. The United States’ biggest foundation is a limited-life foundation — the Gates Foundation is set to close 20 years after the death of its three trustees, Bill and Melinda Gates and Warren Buffett.
Spend-down foundations, as they are often called, are part of a trend that also includes program exits — when a funder decides to exit a body of work for one reason or another. Little is known about the success of foundation exit processes and how exits affect the long-term sustainability of grantees, the field of philanthropy, and the broader community.
To start filling these gaps, the Dorothy A. Johnson Center for Philanthropy collaborated with Independent Sector to design and administer a survey to better understand practices in ending funding relationships from both the funders’ and grantees’ perspectives.