The Gates Foundation, The Atlantic Philanthropies, and other foundations have announced plans to spend-down their endowments to zero. This greatly increases annual spending and gives the programs a sense of timing and urgency.
There are two enormous advantages to spend-down foundations:
* They spend a lot more money: moving from, say, a 5% payout to a 7.5% payout is a 50% increase. This helps solve problems now, not a century from now.
* They have a sense of time urgency: even if they plan to be around for another 90 years (like the Gates Foundation), there is a huge psychological difference between thinking "90 years" and "forever".
These two factors help move foundations away from their greatest pitfall: serving as shrines to their founders rather than serving the public interest (most of the money in foundation endowments is pre-tax "public" money, if factoring in both corporate and inheritance taxes).
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