Rethinking perpetuity strengthened our partnerships, expanded our possibilities, and enabled us to live into our aspirations.
In 2022, The Whitman Institute concluded a ten-year spend-out, distributing the last of its endowment and shutting its doors for good. This page catalogs our journey to spend-out.
A call to action
We enthusiastically encourage other foundations to join us in reimagining their role and responsibility to society by establishing a timeline to wind down and spend out their endowments. Foundations that choose the route we’ve taken can invest all their assets back into the communities they serve, redistributing endowments rather than finding creative ways to maintain them.
“Spending all our assets is ultimately an investment in hope and belief that community leaders, working with thriving democratic institutions, can serve people better than philanthropists can. If we upend philanthropy’s ossified structure of privately controlled money and power and invest fully in a more just and equitable society, economic prosperity will grow, and the need for philanthropy will sharply diminish. So, ask yourself: What are you saving your endowment for?”
Read our Chronicle of Philanthropy op-ed, co-written with the Stupski Foundation and Compton Foundation in July 2020.
Our journey to spend-out
In 2011, TWI found itself at a crossroads. As a small foundation with modest assets, we realized that we could not sustain our level of giving indefinitely (consistently above the legal minimum foundation payout of 5% of assets). At the same time, we could not justify reducing our grants budget at a time when resources were so scarce and our grantees were doing such important work.
We had to make a decision: we could either stretch our resources by cutting back to the five percent payout or we could sustain our higher payout rate, possibly even raising grant amounts, over a shorter time. The board of trustees saw the option to spend out as an opportunity to get clearer about our ultimate purpose as a foundation and to exercise greater influence in the field of philanthropy writ large.
The TWI board made the decision to spend out by 2022, in order to better support our grantees while increasing the visibility and number of funders and investors whose giving practices are aligned with ours. Viewed through this lens, we saw our decision as being both responsive and strategic.
Greater multi-year and annual grants enabled us to better meet community needs over time, while a peer-based organizing strategy led to the launch of the Trust-Based Philanthropy Project as a five-year collaborative funder initiative that outlives TWI.
Read our co-executive director John Esterle’s reflections on the spend-out in Our Story.
Looking forward, looking back
As we looked toward a 2022 spend-out, we turned our focus outward to connect and communicate with our peers in philanthropy. Informed by our grantee partners, we focused on seeding our story and sharing trust-based philanthropy practices with wider networks of investors and funders.
Our story and reflections on spend-out are featured in the following resources:
- Dorothy A. Johnson Center for Philanthropy - Time-Limited Foundations: Lessons from a CEO Peer Group (December 2021)
- Rockefeller Philanthropy Advisors: In Their Own Words: Foundation Stories and Perspectives on Time-Limited Philanthropy (February 2021)
The following aspirations guided our spend-out:
- More funders and investors explicitly value and resource relationship, dialogue, and equity with a lens of trust.
- More funders and investors provide multi-year, unrestricted funding.
- More funders and investors practice the kind of trust-based philanthropy that demonstrates equity in what is often an unequal dynamic.
- More funders and investors question the idea of perpetuity in philanthropy, leading to increases in payout percentages and more foundations deciding to spend out.
As a foundation that counts humility as one of its core values and appreciates the problematic nature of assessing “impact” within complex systems, we nonetheless believe we have had outsize influence given the size of our staff and endowment. As we close our doors in 2022, we see that a vibrant, interconnected network of investors and practitioners continue to bring attention to the importance of relationship, trust, and equity in our shared aspirations towards a world that is more equitable, resilient, and well resourced.
Read more posts about our spend-out on our blog.