Decide to Decide

In this tough economy, one of the most frequent calls we’re receiving at the National Center for Family Philanthropy is from families re-thinking perpetuity. It’s understandable that when the needs are so great, donors would debate whether the immediate impact their foundations could have outweighs the benefit of staying in the grantmaking business to benefit society for years to come. It’s also a question that is arising more often because some of today’s most visible funders, such Bill and Melinda Gates, have announced their intention to limit the life of their foundations. Yet they are the minority. A  Foundation Center/Council on Foundations study last year found that only 12 percent of family foundations plan to limit their life spans.

Regardless of what a donor family’s decision is about perpetuity, it’s good news that more of them are even raising the question. For many years, perpetuity has been the default position. The donor’s legal advisor who set up the foundation assumed it was forever; alternatives weren’t even discussed. Generations later, the family may be grappling with keeping the foundation going as they grow apart geographically—and sometimes ideologically. Yet the subject remains taboo—sometimes because of reluctance to dishonor the donor’s wishes.

I think it’s healthy for donors and families to discuss perpetuity periodically. Avoiding what might be an uncomfortable conversation misses an opportunity to consider the big picture—the family’s goals for their philanthropy. I hope donor families will make it a New Year’s resolution to put perpetuity on their board agenda, and weigh the pros and cons. If the decision is to commit to perpetuity, you might want to revisit that choice every three to 10 years to insure the commitment stays strong and you are doing what you must to be successful over the years.

Susan Price is vice president at the National Center for Family Philanthropy. Price, along with 20 guests, will blog at the upcoming Family Philanthropy Conference in San Diego, January 31 to February 2. If you’re joining us at the conference, plan to attend the session Leaders Salon: Is Giving in Perpetuity Right for your Family? on Tuesday, February 2 from 10a.m. to 11:30a.m.