Arabella works closely with leading foundation professionals who are serious about impact and determined to see their efforts create meaningful change over the long term, but long term doesn’t always mean forever. Sometimes, one of the best ways for a foundation to maximize impact is to spend down its funds and sunset the foundation’s activities. Coming to this decision, and implementing the sunset, is a complex process that involves weighing many variables and requires considerable forethought and planning. Through our work, we have observed that foundations wind up their program and operations with a variety of different approaches, and with varying degrees of success.
With support from and in partnership with the Kataly Foundation, the Arabella team conducted one-on-one interviews with current and former spend-down foundation leaders, and we gleaned valuable insights about the practices these foundations have employed. The below report presents what we learned and accompanying recommendations that, if implemented, could help future spend-down foundations extend their impact far beyond their limited lifespans.
Thoughtfully and intentionally planning many aspects of a foundation’s spend down well in advance will greatly benefit its grantee partners, staff, and the field at large. We recognize that the field has already produced extensive literature on this topic. Our approach with this report is supplement that literature by compiling real-world experience from those who have navigated this journey at their own foundations. These recommendations are only a starting point, and the world of spend-down foundations continues to evolve as more funders embrace the imperative of asset redistribution.
We hope the information we share here will enable spend-down foundations to be supportive employers to their teams, good partners to the grantees and movements they support, and positive forces shaping peer funder behavior by convening and educating others.