There is an on-going debate in the philanthropic community about whether to spend down foundation assets or give in perpetuity. There are myriad variables to consider, such as whether a foundation can find interested family members to carry the torch into the future to more foundational questions (no pun intended), or whether trustees believe that it's more important to invest in today's problems or save for tomorrow's problems.
The right answer for one foundation may not be right for all, but the RTNF board has decided that the right decision for us is to spend down over the next decade. I’ll also note that this is not an entirely recent decision, but was formalized after several years of planning and consideration. While I cannot speak for all of our wonderful board members at once (each board member has slightly different reasons for the decision), I want to share a few considerations that were made.
First, some of us have reason to believe that a host of the global, social, educational, justice, equity, and health care challenges our communities, country, and world faces grow faster than our investments do. For example, there is compelling evidence to suggest that investing in pre-k today returns a greater SROI than our investment portfolio does, and we don't think the principle is limited to pre-k.
Second, there is a gap in funding solutions that we need today, and we feel accountable for and connected to today’s challenges. That is, we feel the problems of our day are ours to own and address, not pass forward to the next generation.
Third, many at RTNF feel that the current structure of philanthropy itself is unjust and undemocratic. While we do our best to invest in social change organizations using an evidence-based approach, it doesn't feel right that a small group of people should make such large funding decisions due to our family relationships. For that reason, we'd like to transfer the Foundation’s wealth back into the hands of those serving the underserved, the marginalized, the disenfranchised, and the people of tomorrow through cost-effective programs that are providing opportunities and relief to these individuals and groups.
There are several other considerations that lead to this decision to spend down, which I'm quite certain vary from Trustee to Trustee, but one thing I am confident in is that we are doing this led by the desire to do the most good. I personally know the Trustees to be noble people with earnest, kind, and intelligent reasons to spend down. In fact, these Trustees have become some of my personal heroes as I've witnessed them turning again and again from every temptation to use the foundation as a vehicle for personal aggrandizement, in favor of earnestly endeavoring to strategically serve others with every dollar with which they have been entrusted. I think it will forever be the great honor of my professional life that I get to participate in this work with them.
So buckle up, everyone!
Over the next few months, we'll begin outlining how our plan to spend down will affect our grantmaking process (spoiler--there will be big changes). As we look forward to closing our doors over the next 10 years, we intend to do so thoughtfully and in full light, so that all of our partners and prospective partners can do more in the present, even while preparing for the future.