e are at a moment where philanthropy needs to rethink its compact with society, its role in solving public problems and its pathways to funding large-scale change. However, as trustees deliberate how to meet the biggest challenges of the moment, one issue they can take off the table is whether founding intents should constrain their conscience. Our research shows that foundation boards have room to maneuver, perhaps more than they realize.
In a study we’ve made of the articles of incorporation and bylaws of the top 50 private foundations in the U.S., funded by Lodestar Foundation, we found no indication that founding intent, nor endowment recovery, prevented or constrained trustees from leveraging endowment dollars when they felt that circumstances and mission merited it.
We even found a surprising amount of fluidity in amending intent, where trustees felt compelled to do so. And perpetuity foundations like Carnegie Corporation, James Irvine, and Annie E. Casey (AEC) are paving the way to changing the everyday payout norm: all three have for years targeted payouts greater than the IRS-required minimum of 5 percent of investment assets, with AEC paying out from 6.6-to-10.5 percent per annum for the past decade.
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