When Foundations' Days Are Numbered

Philanthropies Prepare Groups for End as They Spend Down

Low Tide: Reboot, which receives support from the Bronfman philanthropy, hosts events such as this tashlich for Rosh Hashanah at Open Beach, San Francisco.
Rebecca Goldfarb
Low Tide: Reboot, which receives support from the Bronfman philanthropy, hosts events such as this tashlich for Rosh Hashanah at Open Beach, San Francisco.

By Amy Schiller

Published November 17, 2012, issue of November 16, 2012.
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For ACBP-incubated projects like Slingshot, the process was far more hands-on and gradual. ACBP originally housed and covered all costs for Slingshot. In 2009, the organization began its process of spinning off into an independent operation. Will Schneider was hired as executive director, using a grant from another philanthropy, the Richard and Rhoda Goldman Foundation — another spend-down foundation focused on Jewish life. Schneider’s mandate was to build the board and develop the program plan as well as fundraising materials and donor relationships that would ensure Slingshot’s sustainability independent of ACBP.

Schneider reported that, though initially it was a “slow changing of a narrative” to convince would-be donors to provide support, fundraising has gone very well for Slingshot, growing from two major funders to 18, as of this year. The best thing about the incubation and spin-off, for Schneider, was “the power to plan. I was able to organize my board and my case for support, and I had Jeff [Solomon] and Sharna [Goldseker, ACBP managing director] right down the hall to ask for advice.”

The future is a bit less certain for Avi Chai’s large family of grantees. Unlike many spend-down philanthropies that believe their aggressive spending can help resolve urgent issues, executive director Prager feels that “the needs in 2020 will be great in our field. We won’t have solved the problem by the time we go out of business.”

Asked whether he was confident that the spend-down and its investments in fundraising capacity would make Avi Chai’s grantees self-sustaining, Prager responded: “Some will [be] and some won’t. In Israel, we already wound our funding down over time… some of them have been wildly successful, and some have struggled. I can’t say I’m confident about all of them.”

Not-for-profits that previously benefited from generous support from a major foundation may be spurred to develop greater staff expertise and a broader funding base following a spend-down decision. The practices of Avi Chai and ACBP suggest that spend-downs can galvanize philanthropies to revamp their approach to focus more on crucial overhead, recruiting talented staff and developing a pool of potential funders. According to Fleishman, it may be reasonable to expect a time lag between the death of existing foundations and the emergence of obvious replacements, but “foundations can minimize the likelihood of a rude awakening for their grantees in everything they do, up to the point of the spend-down.”

Amy Schiller writes about politics, philanthropy, feminism and culture. Her work has appeared in The Nation, The Daily Beast, Salon, Alternet and other publications. You can read more at amybessschiller.com or follow her at @justaschill


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