Clock” by John Barker

As the trade association Philanthropy New York reports, this week, the Atlantic Philanthropies foundation (“Atlantic”) released a 56-page booklet entitled “Atlantic Insights: Giving While Living.” The publication, coauthored by Wall Street Journal journalist Heidi Waleson and Forbes editor Steven Bertoni, can be freely downloaded.

The booklet explores foundation founder Chuck Feeney’s philanthropic worldview, which centers on using a limited-life foundation to increase impact by freeing up funds for more rapid deployment. Feeney disbursed his grants broadly, but focused on education, health, human rights, and healthy aging. All told, more than $8 billion in grants were disbursed to nearly 2,000 grant recipients, spread among a number of countries—among them, Australia, Bermuda, Cuba, the United Kingdom (with a strong focus on Northern Ireland), the Republic of Ireland, South Africa, the United States, and Vietnam.

Atlantic has been broadly influential in the philanthropic world, as Nonprofit Quarterly has noted before. As Ruth McCambridge wrote last year, among other things, “Atlantic Philanthropies was known for the attention it paid to the institutions to which it gave, carefully designing the weaning process with many of its longer-term grantees.” Feeney is also notable in the philanthropic world for other reasons: Until the foundation made a decision to become a limited-life foundation, it donated anonymously, and Feeney throughout has maintained a modesty in his lifestyle (flying coach, for example) that is unusual in philanthropic circles.

Philanthropy New York reports that this booklet is meant to be the first in a series, as the foundation seeks to share lessons learned before closing its doors in 2020. Future publications will “examine Atlantic’s support for advocacy and strategic litigation to change harmful and unfair public policies and laws, how it partnered with governments around the world to improve public services, and the purpose of its nearly $3 billion in investments in capital projects.”

As the authors acknowledge, Feeney hardly invented the concept of intentionally spending down foundation assets. The book itself cites the Rosenwald Fund, which gave away all of its funds in the first half of the twentieth century, as well as more contemporary examples such as the Olin Foundation, the Aaron Diamond Foundation, and the Beldon Fund. Still, the authors are surely correct in stating that Feeney helped popularize the concept.

In fact, “giving while living” has gained broad popularity, especially among philanthropists hailing from the tech economy, including such high-profile adherents as Microsoft founder Bill Gates and Facebook founder Mark Zuckerberg, who in 2015 pledged to give away 99 percent of his stock, valued at $45 billion at the time, to charitable causes during his lifetime. The Center for Strategic Philanthropy—based in Durham, North Carolina—provides a useful compilation of prominent foundations that have spent down all of their funds or are committed to doing so. The growth of “giving while living” has also sparked a bit of a reaction. For example, Duke law professor Joel Fleishman’s latest book, Putting Wealth to Work, defends the traditional model of maintaining foundations in perpetuity as often being the most appropriate approach.

One could discuss at length the pros and cons of spending down versus keeping a perpetual endowment. For example, the Philanthropy Roundtable hosts a nicely curated collection of many leading publications on this very topic. Years ago, GuideStar founder Buzz Schmidt, writing for Nonprofit Quarterly, suggested using the term “deliberative deployment” to make the point that the key question is not the speed by which you give out grants, but rather “what is the timing of the strategy you will pursue to maximize the value of your munificence?” In other words, the ends matter. Some goals may lend themselves to high-impact, short-term investment; others may benefit more from a long-term approach that’s best implemented through a perpetual foundation.

Limited-life foundations, as Feeney puts it, involve a focus on “bold bets, big checks, dramatic impact.” What bets you make, however, can vary dramatically. The Olin Foundation famously funded the buildout of right-wing U.S. political infrastructure. By contrast, as cofounder Marnie Thompson relates, the North Carolina-based Fund for Democratic Communities chose to spend down in 2010 for a very different reason—namely, to address the “intertwining economic, social, and ecological crises unfolding around us.…We weren’t even sure how extended a period of time humans really had to sort this stuff out. We decided to spend out all our resources over the next ten years by putting our ideas and money to work in the Southern communities in which they were most needed, at the rate that the communities could productively absorb them.”

There is, in short, a big range. Feeney’s goals fell between those of Olin and the Fund for Democratic Communities. Atlantic also had many more resources. The $8 billion Atlantic gave out is far greater than Olin ($370 million) and completely dwarfs the even smaller Fund for Democratic Communities, which at its peak had less than $10 million in assets in its portfolio.

One benefit of a limited-life foundation is surely that it allows for greater experimentation. After all, a perpetual foundation, almost by definition, involves many hands. Particularly after the founder has passed, even if the foundation is completely faithful to the founder’s vision, it still needs to adapt to changing times. The work, in short, evolves. By contrast, for better or worse, founders have an outsized influence if most granting decisions are made when they are still alive and the founders themselves are still active in organizational decision-making.

Certainly, one lesson of Waleson and Bertoni’s booklet is that the Atlantic was deeply influenced by Chuck Feeney’s vision and guiding hand. What other lessons does their booklet hold? A few—some intended, and some perhaps unintended—stand out.

One key lesson is that relationships matter. For example, Waleson and Bertoni note that Feeney’s support of Limerick University, which ultimately received $178 million in grants from Atlantic, was based on Feeney’s assessment that Limerick was a “school on the uptake and a charismatic leader.” Clearly, the relationship between the school president and Feeney was critical to the partnership that was built—and this story plays out with other vignettes the authors share as well.

Another lesson concerns the importance of investing at scale. As Atlantic’s current president, Christopher Oechsli, puts it, “If you are worried about spending 5 percent or 6 percent of the return of your endowment, because you are planning to be around forever, there are limits on how much you are going to spend. Chuck’s approach was to let opportunity drive your options, not artificial budgets, and to spend to impact, not budget.”

A third lesson, however, is that the field still lacks a good understanding of impact. In the foreword, Oechsli makes incredible claims on Atlantic’s behalf. Oechsli writes:

Among the “what” we have to show for this work: Catalyzing the advancement of knowledge economies in the Republic of Ireland and Australia. Hastening the end of the juvenile death penalty. Supporting grassroots campaigns to help win passage of and implement the U.S. Affordable Care Act and reducing the number of children without health insurance in the United States. Helping bring peace to Northern Ireland. Securing life-saving medication for millions afflicted with HIV/AIDS in South Africa. Reducing racial disparities in destructive zero-tolerance school discipline policies. Helping Vietnam develop a more equitable system for delivering health care throughout the country. Changing U.S. policy with Cuba.

Needless to say, while Atlantic surely contributed to the above, it would be absurd to credit a single foundation for any of those changes (or blame a foundation should, say, the Good Friday Accords fall apart). With the exception of building up universities, where the impact of the grants (including sometimes leveraging government matches) is made clear, the authors do not provide much guidance as to how to think about the interaction of foundation grants with broader world impact. Nor do they say much about the big bets that didn’t pay off. Obliquely, the authors mention that $1 billion—one eighth of all grants—went to cancer and biomedicine research, with no major success stories shared. By definition, big bets involve both potential upside returns and significant downside risks. Assuming big bets merit their name, some are certain not to pay off. It would be nice if Atlantic would share more on each side of the ledger.

Perhaps one of the most interesting lessons is that a limited life foundation may create an incentive to find “perpetuity” in other ways. As for Feeney, one way he sought to forge a legacy was to fund construction. A total of $2.8 billion—or 35 percent of total grants—went to capital projects. As foundation president Oechsli explains, Feeney “liked creating tangible assets and institutions to use like major tools. Buildings also appealed to him…because of his oft-asked question, ‘What have we got to show for our investments?’” Creating a permanent endowment, clearly, is just one way to employ foundation resources to achieve lasting impact.