Interest in 'Giving While Living' Growing, Survey Finds

Interest in 'Giving While Living' Growing, Survey Finds

Wealthy families increasingly are adopting a "time-limited" — rather than "in-perpetuity" — approach to philanthropic giving, a report from Rockefeller Philanthropy Advisors and Campden Wealth finds.

Based on a survey of more than two hundred wealthy families in the Americas, Europe, and the Asia-Pacific that collectively give $2.4 billion annually, the report, Global Trends and Strategic Time Horizons in Family Philanthropy 2020 (56 pages, PDF), found that 62 percent of respondents had adopted the in-perpetuity model, while 32 percent favored a time-limited approach — also known as a spend-down, spend-out, or giving-while-living model. But the report also found that interest in time-limited giving has grown significantly in recent decades, with nearly two-thirds of those who have adopted the model doing so in the 2000s (26 percent) or 2010s (38 percent). Among those electing to spend down, an equal share, 38 percent, opted for a timeframe of between one and five years or between six and fifteen years.

According to the survey, the key motivations cited by donors for adopting a time-limited approach were to see the impact of their giving during their lifetime (30 percent); to increase the impact of their giving by focusing it on a specific interest area (23 percent); and to transfer more of their wealth to good causes sooner rather than later (17 percent). The most commonly cited motivations for choosing the in-perpetuity approach were to provide sustained, long-term support to nonprofits working to address a persistent challenge (71 percent); to more effectively engage future generations in the family’s philanthropy (56 percent); and to have greater impact on beneficiaries over multiple generations (41 percent). More than half of all respondents agreed that the time-limited approach is more likely to have clearly defined goals and timelines (55 percent) and to ensure that a donor's intent is respected (60 percent), while only about a third (34 percent) agreed that it is more likely to ensure transparency than giving in perpetuity.

The survey also found that, for both types of donors, family foundations were the preferred vehicle for their giving (in-perpetuity, 77 percent; time-limited, 52 percent), followed by direct giving (38 percent and 50 percent); that respondents favoring a time-limited approach were somewhat more likely to give through their family business or corporate foundation (24 percent vs. 15 percent) or donor-advised funds (21 percent vs. 17 percent); and that those favoring an in-perpetuity approach were somewhat more likely to give through a third-party foundation (22 percent vs. 14 percent) or community foundation (10 percent vs. 2 percent).

In terms of issue area, the largest share of the average philanthropic portfolio was focused on education (29 percent), followed by health (14 percent), art, culture, and sports (10 percent), the environment (8 percent), and community and economic development (8 percent), with no significant differences between the two approaches. The survey also found that while respondents in North America and the Asia-Pacific allocated 78 percent  and 89 percent, respectively, of their philanthropic dollars to initiatives within their own regions, European respondents allocated 38 percent within Europe, 18 percent to Africa, 16 percent to the Asia-Pacific, 15 percent to Central and South America, and 8 percent to the Middle East.

"This global survey affirms trends that we've identified in our work: the desire for deeper personal engagement, more focused giving, and a commitment to impact that can be seen and assessed,” said Rockefeller Philanthropy Advisors CEO Melissa A. Berman. "Families around the world are actively involved in donor collaboratives, impact investing, media campaigns, and public private partnerships. And as donors become more sophisticated in giving and investing, they're thinking seriously about the time horizon that makes the most sense for the goals, motivations, and visions of their own philanthropy."