Overview

A living donor with newly increased assets decides on a 10-year spend down for his foundation, necessitating the creation of a new model

John R. Hunting had been an active philanthropist in environmental issues for several decades. When the source of his wealth, the Steelcase Furniture Company, went public in 1997, the resources of his foundation, the Beldon Fund, increased significantly. Hunting made a decision to couple the new funding with a commitment to spending all of the foundation's assets and income in ten years. Hunting saw accelerated degradation of the environment on a number of fronts, and wanted to see if he could make a difference in his lifetime, and even galvanize others with greater means - and longer horizons - with his own efforts and zeal. He also chose a time frame that ensured that he would be actively engaged with the foundation throughout its lifespan, which ends in 2009.

Hunting formed a board of experts in environmental advocacy and philanthropy, which hired an executive director, William Roberts, an attorney and economist who had worked on Capitol Hill and at the Environmental Defense Fund. Roberts and the board found few models on which to design their operations, program, staffing and financial planning to fit the needs of a rapid spend down foundation. Instead, they came up with what Roberts calls "a Chinese menu of strategies."

An early consequence of Beldon's need to forge its own operational path was that the foundation initially chose half a dozen program areas to support. But after two years, realizing that it would be impossible to have an impact in so many areas with its limited lifespan and funds, Beldon narrowed its focus to Human Health and the Environment, a related Key States program, and a discretionary grant fund that supported civic engagement activities related to those two major program areas. "As a perpetual funder, you can take your time and gradually back out if things don't work out or if other interests take precedence. But, we didn't have that luxury - we had to find a way to make things work," Roberts says. "We realized that we had to choose issues and strategies that fit within our 10-year trajectory. We narrowed the list down to issues where we thought the climate was ripe for change and where we could have an impact within the foundation's lifespan."

For example, Beldon chose to concentrate resources geographically, selecting a small number of states where the moment was ripe to build the capacity and clout of environmental advocacy organizations. It also carefully selected an issue focus: the relationship between environmental contamination and human health, seeking to expand the base of support for environmental protection to unusual allies such as health professionals and people experiencing adverse health effects. Finally, it focused on building an infrastructure for nonpartisan civic engagement by environmental advocates, an area of emerging interest among environmental grantmakers.

With its annual grants budget of $13-15 million, Beldon has been able to spend three or four times more on grants each year than it would have done at the more typical 5% payout rate. At the same time, spend down has given Beldon flexibility that it would not have had with a financial management setup geared toward perpetuity. For example, in 2001, environmental advocates realized that they were operating in a policy environment not friendly to their goals. Beldon provided one of the lead grants to create a flexible pool of funds, shared by environmental groups at the national level, to be used on an as-needed basis to respond to immediate threats to environmental protections. "By moving large sums quickly, and mobilizing others to do the same, Beldon was able to provide national environmental advocates with the resources to fend off some notable threats. One of their biggest battles was unwanted drilling in the Alaska National Wildlife Refuge," Roberts says. "As a perpetual foundation, given our assets, I'm not sure we could have provided that kind of help."

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  Resources

• Executive Summary
• Full Report
• Order Print Copies

  Report Contents

• Introduction
• Focus: The Whitaker Foundation and the Helen F. Whitaker Fund
• The Learning Curve: The Beldon Fund
• Retooling for Spend Down: The Atlantic Philanthropies
• Giving While Living: The Richard and Rhoda Goldman Fund and the Lewis B. and Dorothy Cullman Foundation
• Quick Spend Down: The Haigh-Scatena Foundation
• Raising the Payout: Evelyn and Walter Haas, Jr. Fund
• Giving 5.5%: The Lynde and Harry Bradley Foundation
• More than Investment Returns: The Needmor Fund
• Ramping Up: The HKH Foundation
• Using All the Models: Endswell Foundation / Renewal Partners
• A Different Strategy: Omidyar Network
• Conclusion
• Selected Bibliography
• Resources
• List of Profiled Foundations
• Acknowledgements

  Upcoming Events

• November 29
  10am - Noon
  NCG Family Philanthropy Exchange and the Stanford Center on Philanthropy and Civil Society are hosting a discussion of Beyond Five Percent: The New Foundation Pay out Menu. This funders only event is free for members.
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