Some of the world’s richest people are turning their backs on charitable foundations that live forever https://hk.asiatatler.com/life/philanthropy-now-how-to-make-an-impact-that-lasts

1. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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As billionaires (https://hk.asiatatler.com/society/digital-darling-nancy-zhang) get
younger, the nature of philanthropy is changing. From Silicon Valley
(https://hk.asiatatler.com/style/coral-chung-of-senreve) to Shenzhen, wealthy people
APRIL 12, 2018 | BY NICK FERGUSON
Some of the world’s richest people are turning their backs on charitable foundations
that live forever
Philanthropy Now:
How To Make An
Impact That Lasts
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who have achieved extraordinary success in a very short period of time sometimes
have similar expectations for their charitable efforts. They want results and are willing
to spend their wealth in their lifetime to achieve them.
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Microsoft founder Bill Gates, perhaps the world’s most famous rich person, has
committed to do exactly this. Rather than ensuring his name will live on forever in the
name of a worthy charity, Gates and his wife, Melinda, have created a foundation that
will spend down their entire fortune within 20 years of their deaths. And they want
others to do the same. Through their Giving Pledge (https://givingpledge.org), they have
encouraged other wealthy individuals to make similarly big bets within their lifetimes
through a promise to give more than half of their wealth to charitable causes. More than
150 individuals and families have taken the pledge so far, including billionaire investor
Warren Buffett, Tesla’s Elon Musk, Facebook’s Mark Zuckerberg and Bloomberg founder
Michael Bloomberg.
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4. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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“These new-style donors think of projects— multifaceted, multipronged efforts
that involve signi cant capital—so they are more likely to invest capital, not just
income,” says Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors,
in a report on how long foundations should last. “Many of these newer donors also have
a lot of con dence. They’ve made a fortune and they believe that the next generation
will make its own.”
This is not the typical model. Traditionally, philanthropists
(https://hk.asiatatler.com/life/hong-kong-top-philanthropists) have taken the long view
Some of the biggest charitable foundations in the world were established many
decades ago by legendary tycoons who cared more about establishing a legacy. John D
Rockefeller established his foundation in 1913 with the goal of “promoting the well-
being of humanity throughout the world.” That’s not a project with an expiry date." “John
D Rockefeller was very precise in not only de ning our mission, but also being clear that
this should always be our North Star,” according to Rajiv Shah, president of the
Rockefeller Foundation.
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(https://hk.asiatatler.com/society/hong-kong-tatler-x-leonard-giving-back-with-
jacqueline-chow)
Photo: Courtesy of Bill & Melinda Gates Foundation
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5. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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Other famous names such as Ford, Kellogg and Carnegie are all attached to multibillion-
dollar foundations that are charged with managing their endowments to continue doing
good work basically forever. And they are not the exception. A survey by the Foundation
Center found that close to two-thirds of family foundations are explicitly set up in
perpetuity, while most of the remainder are established without a de ned end date.
This type of long-term funding can be useful. It provides stability and certainty, which
mean that the foundation can employ professional staff and develop considerable
expertise while at the same time providing reliable support to charities and non- pro ts
they work with. In turn, this means they can develop long-term strategies to achieve
their goals. It can also provide the family with a shared cause over subsequent
generations, which is an important goal for many wealthy benefactors.
Photo: Courtesy of Chan Zuckerberg Initiative

6. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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(https://hk.asiatatler.com/society/game-changer-pansy-ho-has-a-new-vision-for-macau)
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With Asia’s growing wealth, such foundations are increasingly common in this part of
the world. In Hong Kong, Li Ka-shing’s (https://hk.asiatatler.com/society/superman-
retires-5-things-you-didn-t-know-about-hong-kong-tycoon-li-ka-shing) foundation has
been operating since 1980 and seeks “to inspire societal improvement through
supporting education and healthcare initiatives,” and has been established to continue
doing so long into the future. One of Li’s sons serves as its chairman.
However, not everyone is convinced that this approach is the most effective way to
make the world a better place. Many of today’s philanthropists want to see their wealth
have the maximum impact possible rather than establish a legacy that endures for
centuries. “You’re much more likely to make a difference by doing something big right
Photo: Courtesy of Li Ka Shing Foundation

8. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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now than dribbling the money out to the end of time,” said one trustee of the Atlantic
Philanthropies, which was one of the rst foundations to commit its entire endowment
for a xed period.
See also: Investing In The Future: 4 New Technologies To Diversify Your Portfolio
(https://hk.asiatatler.com/life/investing-in-the-future-4-new-technologies-to-diversify-
your-portfolio)
Founded in 1982, Atlantic concluded all grant-making at the end of 2016 and will cease
operations by 2020, enabling it to make large, concentrated investments that it hopes
will produce signi cant and lasting bene ts.
Photo: Courtesy of Bloomberg Philanthropies
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9. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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Instead of creating a foundation to solve tomorrow’s problems, advocates of xed-life
philanthropy argue that philanthropists should focus on today’s problems. For example,
climate change may have passed the point of no return within the lifetimes of people
alive today. Saving money for future spending makes no sense when there may not be a
future, reasoned John Hunting, an of o ce-furniture tycoon who founded a US$100
million 10-year fund in 1998.
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Even before climate change, there were some lone voices arguing against perpetual
foundations back in their heyday. “Permanent endowment tends to lessen the amount
available for immediate needs,” said Julius Rosenwald, the founder of Sears, Roebuck
and Company, and a contemporary of Rockefeller and Carnegie. “Our immediate needs
are too plain and too urgent to allow us to do the work of future generations.”
Some philanthropists also worry that while their money might last into perpetuity, their
mission statement might not. Henry Ford’s son lost control of the board of the Ford
Foundation and quit in 1977 after disagreements over its direction. It might be worth
US$12 billion, but it no longer has any connection to the family.
Photo: Courtesy of Bill & Melinda Gates Foundation

11. 4/30/2018 Philanthropy Now: How To Make An Impact That Lasts | Hong Kong Tatler
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See also: Earthly Treasures: Sustainable Investments In A Low Carbon Economy
(https://hk.asiatatler.com/life/earthly-treasures-sustainable-investments-in-a-low-
carbon-economy)
Such problems can be mitigated by careful and thoughtful drafting of a foundation’s
mission, say philanthropy advisers. While there may be drawbacks to perpetual
endowments, spending down over a speci c period also presents some challenges. For
very large foundations, it can be di cult to spend huge sums by a xed date, as the
Atlantic fund found in its later years. Far from increasing the effectiveness of a donor’s
philanthropy, this can lead to misallocation.
For philanthropists who wish to focus on solving today’s problems, it may still make
sense to have an open approach to a foundation’s time horizon instead of creating an
imperative to spend down simply for the sake of hitting an arbitrary deadline. As some
millionaires and billionaires have learned, making money can be far easier than giving it
away.
See also: 15 Of Hong Kong's Most Powerful Women
(https://hk.asiatatler.com/society/15-hong-kong-powerful-women)
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