John D. Hunting had one thing in mind when, in the mid-1990s, he wrote to the board of Steelcase, the furniture company co-founded by his father, to request an initial public offering. Unusually, it wasn’t that the listing would bring him a fortune worth $150 million.
Instead, he wanted to give it all away.
Hunting had spent a lifetime giving away money. He had tried anonymous donations, then in 1961 set up the Dyer-Ives Foundation, named after his two grandmothers, which would go on to support wayward students at two Michigan academies. In 1982 a second fund, called Beldon, followed, promoting environmental causes.
By 1998, Hunting was 68 and reasoned that to see results in his lifetime, he needed to accelerate his largesse. After the Steelcase IPO he sold his shares, restructured the Beldon Fund, and staffed an office in New York with one mission: to spend $100 million in ten years.
Most wealthy individuals set up foundations to exist in perpetuity. But a growing number are adopting Hunting’s approach and flooding a cause with funding within a relatively short space of time. In 2013, Bill Gates announced that the Bill & Melinda Gates Foundation, the largest fund of its kind in the world, would spend out 50 years after the founders die. Warren Buffett has said that he and Gates were inspired by Chuck Feeney, the billionaire founder of Duty Free Shoppers who set up Atlantic Philanthropies in 1982. (It will close in 2020.)
Exact figures are hard to come by, but a study by the Bridgespan Group found that 50 years ago, spend-down strategies accounted for 5 percent of the total assets of America’s 50 largest foundations, compared with 24 percent in 2010. As the number of ultrawealthy people in the world grows, the number of spend-down foundations is expected to rise.