January 24, 2018
At some point in their lives, high-net-worth individuals with philanthropic inclinations must answer an age-old question: Do I commit all (or most of) my resources to charitable causes in my lifetime, or should I create a giving vehicle that exists in perpetuity?
In Putting Wealth to Work: Philanthropy for Today or Investing for Tomorrow?, social sector veteran Joel L. Fleishman, director of the Center for Strategic Philanthropy and Civil Society at Duke University, examines the two sides of the question, finding strengths — and weaknesses — in both approaches and ultimately concluding that the correct answer is not either/or but both/and. In arriving at that conclusion, he also provides readers with an overview of modern American philanthropy, including the fairly recent advent of the Giving Pledge and the growing popularity of funder collaboratives; a brief history of limited-life foundations (i.e., foundations that have decided to "spend down" their corpus by a specific date); and a framework for critically evaluating this ever-green conundrum.
In the book (a follow-up to his well-received The Foundation: A Great American Secret; How Private Wealth Is Changing the World), Fleishman carefully deconstructs the arguments commonly made by "anti-perpetuity" critics and in the process does his best to separate fact from fiction. For example, anti-perpetuity critics often cite Henry Ford II's resignation from the board of the Ford Foundation in 1976 as evidence that foundations created to exist in perpetuity inevitably depart from their founding donor's intent. Fleishman, however, debunks the "myth" that Ford "should be regarded as the poster child for departure from donor intent," arguing that "no donor intent had been embodied in the legal instrument that created the…[f]oundation." He goes on to attribute the persistence of the myth to the conservative-leaning Philanthropy Roundtable, which has "kept alive a questionable interpretation of Henry Ford II's role in, [and] resignation from, the Ford Foundation," as well as other similarly inclined think tanks for "imputing departure from donor intent specifically to liberal foundations." The reality, writes Fleishman, is that "thousands of foundations that were founded by now-deceased donors do not appear to have wavered to any significant degree in trying to fulfill the intention of their founders."