Abstract
Although most foundations are established in perpetuity, the limited life option is attracting more attention. This monograph helps fill a gap in the literature by examining the motivations, strategies, and experiences associated with the decision to "sunset" and comparing the attitudes and practices of perpetual and limited life foundations. The report draws on survey data on over 800 private foundations with varied longevity plans, and in-depth interviews with 31 foundations that have considered or plan termination.
"I started the foundation in order to do what I wanted. . . . Twenty-five years after I'm
gone, the foundation will terminate." The donor who said this describes himself as
"not super-conventional." His decision to limit his foundation's life is indeed an unconventional
one. Most foundations are established in perpetuity, but the limited life option
is starting to attract more attention, including media coverage of high profile examples
of foundation closures. A major gap in the literature on philanthropy, however, is the
absence of research on the motivations, strategies, and experiences associated with the
decision to sunset. Consequently, little information is available to assist donors, foundation
trustees, and staff wishing to consider and/or implement a plan to sunset.
The purpose of this discussion is to help fill this gap. It is not to advocate either for
or against sunsetting but rather to shed light on it as an option, and to glean lessons from
those that have undertaken it that may prove helpful to donors and foundations considering
or implementing a plan to sunset. Furthermore, the research literature typically
focuses on foundations with a permanent endowment (and sometimes takes for granted
that a permanent endowment is part of the definition of "foundation"). By looking at foundations
that do not intend a permanent endowment and asking what impact the decision
to terminate has on such a foundation, this study also seeks to broaden our understanding
of foundations and their possibilities. The discussion and the conclusions are offered
in a preliminary spirit intended to spur and inform future research. Much additional work
on sunsetting remains to be done.
In this spirit, we emphasize the fundamental differences we found among limited life
foundations and strongly recommend that future research and discussion incorporate a
greater recognition of these. We suggest many of these differences can be summarized
along three dimensions related to the donors' and/or trustees' orientation toward sunsetting,
as follows:
- To what extent do donors and/or trustees approach sunsetting as a positive strategy for
achieving some purpose? For instance, donors may choose to sunset because they want
personal engagement with giving during their lifetime.
- To what extent do donors and/or trustees choose sunsetting because they lack other
options, or have a negative view of perpetuity? For instance, some donors choose to
sunset because they have no children to carry on the foundation, while others want
avoid the bureaucracy that they associate with institutionalized philanthropy.
- Do donors and/or trustees view sunsetting solely a personal preference, or do they
explicitly link it to achieving specific philanthropic outcomes? For instance, some
choose to sunset solely because they believe that is the best way to ensure the foundation
stays faithful to the donorâ??s intent, while others feel that spending more money in
a shorter period provides a more effective way to achieve a particular philanthropic
outcome.
End of Excerpt. View the entire report in pdf format.
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
Usage, posting and reprint of materials on the UI web site:
Most publications may be downloaded free of charge from the web site in PDF format. This information may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required.
Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact paffairs@urban.org.
If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.
Latest Research
Browse by Topic:
PDF
Printer-friendly summary
