My friend Susan is a fan of my blog and usually sends a note to say that she agreed with what I wrote that week. But not when she read my post, “An Approach to Funding That Might Actually Work.”
“What’s your big problem with perpetual endowments?” she asked. “I don’t have kids, and I want to leave my mark in the world. I really like the idea of creating a fund with my name on it that will work forever for a cause I care about.”
Susan, a wonderful woman and an active environmentalist, in this case is being very traditional. And she’s not alone. Nearly every time I question the assumption that permanent endowments are a godsend for each and every nonprofit, people respond with shock. But question it I do.
Here’s how I responded to Susan:
“Let’s say you leave $250,000 to create the Susan Fund at the local land conservation organization. The Susan Fund would spill out $10,000 or $12,000 a year to support the group’s operations – or, perhaps, a specific part of the operations. Not bad. But not transformational.
“But let’s say instead that you create the Susan Environmental Leadership Fund at the same organization. The Susan Environmental Leadership Fund is set up so that, each year for ten years, the fund provides the organization with $25,000 plus earnings as an internship honorarium for one of the country’s most promising environmental studies students.
“Over the years, those ten interns would make a significant impact on the organization, but more importantly they would then go out into the field after their internships are over and do important work. They would become environmental leaders, working for half a century or so each to preserve the planet. That’s 500 total person years of productive work for the cause you care about – and these ten Susan Environmental Leadership Fund alumni will affect hundreds of other staff members and volunteers (and, of course, the environment!) along the way.”
True: after ten years and ten interns, Susan’s fund will be used up. But wouldn’t the ongoing living impact of so many environmental leaders be a more significant legacy than a fund created in perpetuity?
One of my great heroes is Jackie Robinson, who said, “A life is not important except in the impact it has on other lives.” I suggest that the impact would be greater if philanthropists affected more lives now and created a legacy measured in changed lives and societal improvements, rather than the dollar amount of endowment funds that bear their names.
Here endeth the latest heresy. Your thoughts?
Copyright Alan Cantor 2012. All rights reserved.