By Todd Cohen
While Warren Buffet’s $31 billion gift to the $30 billion-asset Bill & Melinda Gates Foundation got the biggest philanthropy headlines of 2006, the Gates Foundation’s decision to spend all its assets within 50 years of the death of its last trustee may have been an even bigger story.
Philanthropy should be about giving, not hoarding.
Sadly, many foundations worry more about preserving their wealth than sharing it, figuring they can do more over time.
Growth is good, and foundations must invest wisely.
But foundations also covet the power and influence that flows from the wealth they control.
Federal law requires that foundations spend at least 5 percent of their assets each year on grants and overhead.
Faced with proposals that Congress require they spend more, big foundations have invested millions to fight any increase.
The Gates Foundation is a rare exception, as is The Atlantic Philanthropies, which aims to spend its entire endowment of nearly $4 billion before 2020.
And both foundations are using their spending strategically to attack the root causes of critical social and health problems.
Through their commitment to spend all their assets, these foundations make clear that the focus of giving should be change, not self-preservation.
Todd Cohen is the Editor and Publisher of the Philanthropy Journal.