Overview

Two hands-on donors choose to give everything away during their lifetimes.

Seven years ago, Richard Goldman decided that his San Francisco-based foundation would raise its payout to 10% in grants. "The purpose was to encourage people to raise their level of giving," Goldman, who is now 86, says. "Five percent is just a number picked by Congress." Goldman felt the money should go to work sooner rather than later. He was also disturbed by reports of excessive administrative spending by foundations, and was critical of the steady accumulation of assets in endowments. He chose the 10% number, and decided that within ten years of his death, the remaining assets of the foundation would be distributed among the foundations of his children. He decided against trying to spend all the money within his own lifetime, reasoning, "If I did, I might push too hard, and make some mistakes."

One aspect of Goldman's philanthropy will exist in perpetuity, however: the Goldman Environmental Prize, founded in 1990, which awards $750,000 annually to draw attention to people doing environmental work under difficult conditions, is endowed with $70 million. "As long as there's a need, it should be there, without having to raise more money," Goldman says.

The foundation, which focuses on the environment, Jewish causes, Israel and the Bay Area, had assets of $450 million at the end of 2006, and gave $43 million in grants. It funds some large capital projects, and gives annual operating support to about 80 Bay Area organizations. The higher payout rate, says Amy Lyons, the foundation's executive director, gives the foundation the freedom to "think bigger, and more creatively; to pursue things you might not have before." One example is the foundation's recent $1 million in grants to mark the 25th anniversary of AIDS. "We don't regularly fund AIDS, but this was a one-time big push. It got local press, and helped raise visibility about the ongoing AIDS crisis. It was a big help for some of the groups, many of whom are struggling, and some of whom had cycled out on their funders. They were able to relax a little in fundraising."

Richard Goldman is an active participant in the Fund's work. He comes to the office every day, makes grants between board meetings, and regularly meets with grantees. "We're following his direction, and not getting bogged down in details," Lyons says. The Fund is talking about closure issues, but has not yet put a definite plan in place. The Fund's investment management is overseen by Goldman's own advisors - it has no dedicated in-house financial staff for that purpose, but it pays investment management fees. Goldman says that when the fund switched to a 10% payout, the investment policy became more conservative; now, he says, "we are going to be more flexible."

Goldman feels strongly about his projects - the rebuilding of a trail from Cliff House to Sea Cliff in San Francisco; a promenade in Jerusalem which is one place, he says, "where Arab and Jew walk together." Of the three children who will inherit the assets of the Fund, one is on the Fund's board, another is on the Prize board, and a third lives on the east coast, "but we consult." He hopes they will carry on the tradition. Do they pay out 10% from their own foundations? "I don't know - they're building now. They'll get to it sooner or later."

Lewis Cullman's plan for his foundation is to have it spent out within a year of his death. He believes that money should be spent now; and that future generations should take care of future problems. His idea of philanthropy goes back "to what I learned as a little boy from my mother - I don't care what people say about me when I'm dead. I won't be around to hear it. Why not get the joy out of spending your money while you're alive?" Cullman's life as a full-time philanthropist began in 1999, when he sold his business (the company that makes the At-A-Glance calendars) and put the proceeds into a foundation to give him some time to think about how best to spend it.

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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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  Supporters of
  “Beyond 5%”

• Beldon Fund
• French American Charitable Trust (FACT)
• Quixote Foundation

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