Deirdre Mortell is Co-Founder & former CEO of ONE Foundation, a 10 year spend down foundation, based in Dublin, Ireland, which worked on youth mental health, immigrant rights, children’s rights and social entrepreneurship, in Ireland and Vietnam. ONE closed in December 2013. She writes in a personal capacity. ONE Foundation Final Report 2004-2013 is available here.
‘Try it … you’ll like it’, declared billionaire businessman and philanthropist Chuck Feeney.
Chuck Feeney, along with his daughter, Diane Feeney, are perhaps the highest profile advocates of spending down a philanthropic endowment. They have separately set about doing so with vigour and determination: Diane Feeney closed the French American Charitable Trust in 2012; and her dad Chuck will close Atlantic Philanthropies in 2016-2020, having closed three of its six operating countries in 2013. Both father and daughter have extensively and thoughtfully documented their motivations and strategies for “spend down”, and it is said that Chuck Feeney’s example persuaded the Gates Family to follow suit.
They’re not alone. This year US media have published a steady stream of stories on spend down philanthropy, with increasing numbers embracing the approach. The UK and Europe have been slower to adopt it as a viable option, with honourable exceptions like the Tubney Trust and Diana Princess of Wales Fund. Europe’s latest addition to the still very exclusive “spend down club” is Ireland’s ONE Foundation, which closed in 2013, and for which I was Co-Founder & CEO.
So, why adopt spend down as a strategy for a foundation or trust?
ONE’s Final Report 2004-2013 shares its early motivations as well as its conclusions ten years later. ‘It had the immediate effect of transforming the capital available to ONE’, it declares. ONE was set up with a determination to solve issues, not just alleviate them, and we believed those we faced were sufficiently urgent and important to justify throwing all our capital and resources at them, in the hope of making an impact that could not be achieved by drip-feeding grants from the interest on capital alone.
Additionally, we agreed that saving cash for later felt like planning for failure rather than success. Not to imply we expected to make no mistakes or never to fail; rather that we wanted to focus on impact and learning from our mistakes over our planned ten year life.
Ten years later, do we still feel the same?
We have concluded that choosing a limited life model really focuses the mind. ‘Whose mind?’, you might (rightfully) ask. ‘Everyone’s’ is the answer; the board, staff, and grantees. It drives urgency and a focus on results. It does not rule out taking risks, but encourages calculated risk-taking. It motivates the staff as they have the opportunity to own the results that are achieved. And finally, if philanthropy is a relay race, it gives the next generation of younger philanthropists (and I don’t mean family members) the space and encouragement to step up and do their own thing.
As Atlantic Philanthropies President, Chris Oechsli, stated earlier this year, ‘Like a symphony, the themes, movements and passages in our prior grantmaking are coming together in a crescendo that we hope will resonate long after the playing of the final note.’
Having recently read NPC’s 10 innovations in global philanthropy, I wonder could “spend down” be Innovation #1 in 2015? It meets the criteria—a new approach emerging in global philanthropy, and scalable in UK. And, like all innovations, it will take openness, leadership, and trying new approaches to make it work. You read it here first.