June 19, 2017; Detroit News
When NPQ reported on a new startup foundation on a course to spend out the entirety of its $1.2 billion in assets over 20 years, we did not anticipate that this would be such a challenge. Still, eighteen months along, the Ralph C. Wilson Jr. Foundation is having trouble spending even its net earnings. A total of $56 million was given away last year, but the asset base earned $57 million. “So essentially,” says foundation President Dave Egner, “We were $1 million in the hole.”
Spend-down foundations differ from foundations established in perpetuity in the time frame for spending down assets. You can read more about them and the considerations around time frame in today’s feature.
Ralph Wilson, who died at 95, was the longtime owner of the NFL’s Buffalo Bills. His focus was on “children and youth, including early development, after-school programs and sports; education and skill training for young adults and working-class families; resources and education related to caregiving; and crafting healthy communities in ways ranging from design to innovation to nonprofits.” But doing that with this massive cash capacity means that instead of supporting local junior sports teams, for instance, it has endowed funds at the community foundation to support ongoing activity in some of these areas.
“If we were going to run that sort of small grant, we’d need three to five more people,” Egner says.
Maybe they went slightly outside of their core mission with a $2 million grant to the capital campaign for the Lucille Ball Desi Arnaz Museum & Center for Comedy in New York, but it was classified as economic development, and without it, the foundation might have been $3 million behind.
This year, the foundation may once again be upside-down in the spend-down game, but Egner says its grants will get larger over time as their strategy gains more focus. He knows that their yearly gift distributions need to total between $75 million and $100 million, and that will take some massive individual grants.
We have an idea for Egner, by the way: Since caregiving is one of the foundations’ focuses, as is economic development, why not help seed a strong system of caregiver co-ops, as has been modeled elsewhere? It is an endeavor that would improve the lives of caregivers themselves, of their families, and of those whom they care for, as is detailed in this article. It is a model that needs serious capital to be taken seriously elsewhere, ergo….—Ruth McCambridge