Earlier this month I wrote about the Gates-Buffett Giving Pledge and the opportunity it affords donors to pursue a "giving while living" approach to charitable giving (See "Stepping Up to the Lifetime Giving Challenge"). As part of their effort to encourage high-net-worth individuals and families to give more, the Bill and Melinda Gates Foundation invested over $8 million in the creation of educational materials aimed at equipping donors, especially new and emerging donors, with the tools and information they need to become effective, hands-on philanthropists.  Since the launch of the Giving Pledge, over 40 wealthy families have signed on to the pledge, thereby agreeing to give away at least 50% of their estates to charity. When and how these families will fulfill this commitment is largely unknown and some leaders in the philanthropic sector are encouraging them to put those dollars to work now, rather than later, in order to address some of today's most dire social problems.  As I discussed in part one of this commentary, by spending down their charitable assets in a specified time-frame, donors can learn and practice the art of charitable giving while addressing pressing needs and witnessing the change they have helped to create.  This time-limited option may be worth considering if you have been inspired to become an active lifetime giver by the bold commitments made by some of the countrys wealthiest families. Should you decide to pursue this strategy, it might be helpful to take into account the following considerations when working with your advisors to implement a spend-down approach to giving:  --Choose trustees who possess expertise in your foundation's priority areas (e.g., early childhood education, homelessness, medical research, etc.) and who share your passion and vision for your philanthropy. This was one of the central findings to emerge from John R. Thelin and Richard Trollinger's study on foundation spend-down.  --Consider the effect a spend-down policy will have on your investment strategy. In a spend-down situation, investments typically become more conservative and are aimed at preserving assets rather than growing them.  --Develop a clear grant-making strategy and consider innovative ways to maximize support of the organizations you care about, whether through challenge grants, project-specific grants or capacity-building/technical assistance grants aimed at strengthening organizations' infrastructure for the long term. You may want to look to the example set by the Andrea and Charles Bronfman Philanthropies (see our interview with Charles Bronfman and ACBP President Jeffrey Solomon from December 2009), which will spend down its endowment by 2016.  --Communicate with grant recipients about the fact that your trust or foundation is time-limited. This way they understand that your support has an end date and can plan their fundraising efforts accordingly.  --Measure the impact of your charitable dollars. Evaluation of a limited-life foundation's impact is critical to informing trustees' decisions about how and who they want to fund in order to accomplish their goals by the spend-down date. Building in evaluation tools and systematic reviews at a foundation's inception can ensure that these planning tools become part of the foundation's culture.
Even if you don't have billions to give, you can still make an impact with smart charitable planning strategies.