This is a very big gift for the city would be a understatement.
If someone was going to be a fan of a professional sports team based on the quality of the human being that owned them... the Buffalo Bills would be the one.
http://www.freep.com/story/money/bus...tion/91273982/
Snippet...
That is unusual. Normal is to grow it as an investment fund, dole it out in a sustainable amounts while soliciting more donors to the foundation.Quote:
And in a wrinkle unusual for foundations, the mandate Wilson left for his foundation before he died in 2014 was for his friends to give away every penny in 20 years or less. The foundation staff will carry out that mandate from a new office in Detroit's New Center district it plans to move into next year.
I guess he wants loud big impact now.So let's see $1.2 billion / 20 years = $60 million per year + a few million more assuming the unspent balance grows.Quote:
The life trustees already have made about $60 million in grants while still getting organized because, as Egner said, "They kept hearing Ralph in their heads saying, 'Throw the ball. Don’t wait. Do something!' "
Quote:
Originally Posted by Lowell
The short time limit must be the recent fad lately. Bill Gates and Mark Zuckerberg have also attached time limits to their charatable gifts.
To each their own I guess, but I am really thankful for the long standing Kresge, Kellogg, and other Michigan based charaties that continue to bless our communities.
Nice to see a charitible foundation used exclusively for charity. Many are increasingly devoted to politics and accumulating power with dark money.
There's a natural tendency for bureaucracies to become self-serving. I suppose this kind of time limit drives the foundation to achieve goals, and not build empires.Quote:
Originally Posted by Bobl
I have mixed feelings. Clearly organizations like Ford Foundation and Kresge Foundation have substantial impact. Their model is to live off the interest and invest prudently to maximize the long-term impact's their creators desired. No doubt a lot of money goes to adminstration. But in the long-term, I'd think an enduring organization might accomplish more.
I'd never heard of this 'timeline' type of charitable giving. Curious about it.
Maybe this is not a new fad, but rather a sample of the future.
This article discusses the differences of the Ford Foundation funding model, i.e. the “staff intensive” vs. the “Lean Funder” model of New Funders.
http://www.insidephilanthropy.com/ho...-that-mon.html
A final reason foundations shouldn't grab power for themselves is that, arguably, those closer to the ground are in a better position to call the shots in civil society than a cadre of elites who are famously insulated from any candid feedback about their actions. Some might say this is the best reason that foundations—much smaller and less costly foundations—should mainly write checks and get out of the way.
One nonprofit leader, Nancy Lublin of Do Something, went so far as to give this advice to Ford: Sell that fancy midtown building, fire most of the staff, and move to a loft in Newark to "live your values." [Edit: or DETROIT]
And one other point. If you want to calculate the annual grant amount assuming the principal balance is invested, then use a mortgage payment calculation. In this case Present Value is 1.2 billion, Interest is [[assume) 5% and the Term is 20, then the Payment is $6.6 million. Or 10% more to fund each year.
so what type of projects is this group looking to fund?
The article states the reason for the 20 yr. limit is that he wanted his friends who he designated to run the foundation to distribute the funds according to his wishes, not have some bureaucrats handing out the money 50 yrs. later.
I used Google's mortgage calculator to come up with a monthly payment of just over $7.9 million per month, or about $95 million per year. With a 5% return, the fund will earn around $60 million for the first few years. That is high enough that they may find they have trouble getting applications from enough good causes to donate to.Quote:
Originally Posted by Packman41
I think it isn't a bad idea to sunset a foundation like this. The most prominent example I know of is the Aaron Diamond Foundation, which supported various causes, especially HIV research, until it ended. As people said earlier, this way the foundation is more likely to work on problems the founder would have cared about, and can put more money to work sooner.
There isn't anything wrong with the perpetual sort of foundation, but it does have more overhead, and it can drift very far from the donors' intent. As time passes, even clear instructions can be overturned, as in the case of the Barnes Foundation and its art collection.
I work in philanthropy and this "spend down" approach makes me sick. This could have been a huge asset for Detroit; instead, it will be a bunch of hasty gifts and then no more.
If you work in philanthropy and you don't respect donor's wishes and decisions, you might be an examle of why a donor decides its better to 'spend down' quickly.Quote:
Originally Posted by 1953
[[Not meant as a personal attack, which I think we should avoid. But its not your wealth, its the donor's.)
Hmm.Quote:
Originally Posted by 1953
I run a small charity.
When I took it over, some years ago, one thing I said to the board was, if I do my job properly, this charity will cease to exist within 20 years.
In other words, I believe that a charity is created to remedy a perceived ill in society.
That could be curing a disease, or ecologically restoring a piece of land, or measures to reduce poverty.
If you are still at it 20 years later, you didn't cure the disease, the land isn't restored and the people are still poor.
Not a great track record.
Now, to be clear, there are exceptions to this line of thinking.
The case for endowments does exist.
Funding scholarships/bursaries might be done this way; or perhaps operating a conservancy for a park or using proceeds to make a museum free or free for children etc.
Those are completely fine by me; though in some sense, I would rate them as complete projects or thoughts in their own right.
In other words, once the scholarship is endowed, it should require very little oversight or bureaucracy associated with it.
And likewise an endowment sustaining free admission to a museum is simply a perpetual investment fund/revenue source with hopefully very little administration.
Most charities, however, I think pursue causes which can and should be resolved in the lifetimes of the initial donors.
If not, the people donating aren't getting bang for their buck.
I didn't say I would ignore the donors wishes...I just really hate to see what could be an incredible asset for the region wasted.
I share the same concern. Unfortunately, where the difficulty lies is that 3 people can have 3 different criteria to determine what is "wasteful".Quote:
Originally Posted by 1953
- Is buying food for a homeless person wasteful?
- Is building 6 lanes onto I-75 wasteful?
- Is teaching someone a skilled trade wasteful?
- Is training people to speak in Mandarin and to code computers wasteful?
- Is paying operating expenses equal? Those expenses will simply return next year.
- Is it wasteful to build 30 new schools rather than renovate older ones?
This is the difficulty. How we prioritize problems is a deeply personal decision...and then the method of prioritizing proposed solutions is a deeply political one.