A growing number of philanthropists are choosing to spend down their foundations' assets within their lifetimes, the reports.
Fifty years ago, only 5 percent of the total assets of America's fifty largest foundations were held by foundations planning to spend down their assets, compared to 11 percent in 2010, a study by the found. "It's a significant shift," said Melissa Berman, CEO of , a New York City-based nonprofit that advises on and manages more than $280 million in annual giving. "For many decades, donors setting up foundations just assumed they'd be around forever."
There are many reasons why a founding donor may decide to spend down a foundation's assets, including lack of interest among his or her heirs and a desire to create greater impact during his or her lifetime. And because spend-downs typically disburse funds at a higher annual rate than foundations established in perpetuity, they can be especially influential if they concentrate their giving in a single area of interest.
"Like Bill and Melinda Gates, [some philanthropists] believe they can make deep investments to address today’s biggest problems," said Elliot Berger, managing director at in New York City. "And that other donors will emerge in the future to tackle the problems of tomorrow."