Value, Time, and Time-Limited Philanthropy

Value, Time, and Time-Limited Philanthropy

Leaders of limited-life foundations often assert that spending all of their resources in a relatively short period gives them the ability to do more good, to produce more social value, than if they were to hold the same resources in a lasting endowment and disburse only the proceeds. The question that naturally follows from that proposition is: How would we know whether, or when, this is true? 

In this paper, author Tony Proscio draws on a discussion from a 2016 conference of philanthropic leaders who applied the broad logic of investment returns to try to answer the question of whether comparatively short-term foundation investments can generate a greater return than could be achieved by preserving capital indefinitely and spending more slowly. For their discussion, the group examined three Atlantic initiatives that focused on achieving these outcomes:

• Better Services for Children in Ireland 
• Ending the School to Prison Pipeline in the United States 
• Increasing the Supply of Nurses in South Africa 

According to Proscio, while neither the paper nor the discussion on which it was based attempts to evaluate the actual social returns the three programs might have achieved, it elaborates — “with some roughly financial reasoning” — why other foundations might share Atlantic Founder Chuck Feeney’s belief that they can produce “greater value and impact” by putting all their resources to use in a limited period of time than by creating a lasting endowment.