Better spent? Lessons from the Foundations Spending Down

by Lara Bautista

Why spend out?  

The decision to spend out can stem from very different places: principled discomfort with how wealth is accumulated, a conviction that concentrating funds into a shorter period is more effective, or more pragmatic concerns around governance or resources. For some smaller organisations, there is also a straightforward logic: long-term, unrestricted grant-making is more expensive, and spending out (by depleting capital) might simply be what it takes to fulfil ambitions. Often, said Oliver, these motivations merge and evolve, and what starts as a practical decision can develop into more intentional rationale along the way. 

Ironically, a lot of spend-downs are thinking much more intentionally about the long term than a perpetuity foundation would be with a three-year strategy.” – Oliver French

Across the spend out learning community that Oliver and Sally convene, they said spending out emerged as both liberating and energising. The urgency of an end date reinvigorates funding practice: bigger budgets enable more ambitious, longer-term grants; deeper relationships develop when attention isn’t divided across an ever-expanding portfolio; and more trust gets placed in grantees, with the case for holding a tight leash weakening when you know you’re leaving.

According to Oliver, spend-out foundations may ironically be able to think more intentionally about the long-term sustainability of their work because of how a fixed end date can sharpen everything that precedes it to support a lasting legacy. 

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Spending out in practice: two case studies

“Spending out is a catalyst to make your very best effort. It’s your only chance.” – Sally Vivyan

Sally spoke on her experience as Co-Director at Gower Street, a family foundation committed to spending out by 2030.

For Gower Street, the decision to spend out was grounded both in the urgency of its focus area – climate change – and the practical reality of its resources stagnating. According to Sally, spending out has enabled Gower Street to maximise its remaining £8 million pot, funding at a bigger level, over more years and with a larger group of grantees spanning the UK and Ghana than would otherwise have been possible. Sally shared how spending out has also shifted the foundation’s sense of purpose: away from getting money out the door effectively, and towards field-building, knowledge-sharing and setting partners up for success well beyond the life of the foundation itself. 

For the Sir Ernest Cassel Education Trust, Sally says the decision to spend out was driven by two key factors: the erosion of the Trust’s endowment over the past century, combined with the closure of reliable funding sources for girls’ education (within the Trust’s funding priorities). Together, these made the case for spending out clear: a small number of substantial grants would meaningfully strengthen struggling organisations in the Trust’s funding areas, rather than stretching limited funds too thinly to make a real difference. The Cassel Trust closes this summer, with its final grant extending to 2029. 

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What this means for everyone

The decision to spend out is highly individual and undoubtably complex. The speakers were clear that the practices spending out tends to enable – flexible funding, sustained relationships, attention to grantee sustainability, honest communication – aren’t particular to spend-outs. As Oliver put it: “in many ways, spend-out philanthropy is just philanthropy”.

The critical difference is urgency, with spending out creating a kind of pressure that makes funders follow through. 

Once you make the decision to spend out, there’s this fundamental shift towards having to trust your grantees more, because they are the agents of change who will go on after you, and your role is to invest in them as best you can. – Oliver French

Along these lines, the webinar surfaced several takeaways valuable for any grant-giving organisation:

• Spending more and spending better must go hand-in-hand: Pressure to get money out the door can subtly undermine more intentional approaches to grant-making. The spend-out experience sharpens the question of how to spend more alongside spending better, rather than letting urgency collapse one into the other.
• Know where you sit in the funding ecosystem: Who are you funding alongside? What happens when you exit a relationship – or when another funder does? Cassel Trust’s decision was partly shaped by watching reliable multi-year funding for girls’ education disappear.
• Trust follows from knowing who actually creates change. The goal is to give your funded partners, who are often the direct drivers of change, the best possible chance, and to accept that you won’t always be there to see how it lands. While this must be directly reckoned with within a spend-out, it involves a shift away from short-term attribution and towards long-term contribution, that is available to any funder, at any point.
• Start with a better question. Rather than asking whether your organisation should exist, or for how long, Oliver suggested asking: ‘What is the best distribution of the resources we hold for the values and intentions we have?’ This is a question relevant to every grant-giving organisation, at every stage. 

“Are you the big anchor funder that space needs for the long term? Or are you a smaller, scrappier funder who could have much greater impact by really strengthening great grantee organisations – if you chose to spend out?” – Sally Vivyan

Even without broaching the question of spending out, it’s possible to generate the kind of intentionality the experience tends to force. Sally recommended simply to close your eyes, imagine your foundation closing in ten years’ time, and envisioning what you want your impact to have been, to work backwards.