Kudos to The George Gund Foundation for its decision to respond to the current financial crisis by increasing the percentage of its assets it will give away. The Nonprofiteer views this as the only defensible position for those who hold accumulated assets tax-free, and is always happy to welcome another participant to the fold.
She’s disappointed, though, at Gund’s failure to describe publicly the magnitude of the increase it intends. The Foundation’s language on the subject can almost be described as “weaselly.”
Federal tax law requires that we spend 5% of our assets every year, and we always exceed that minimum. But in 2009 we will go substantially beyond that. However, because our portfolio is diminished, the dollars available for grants still will likely decline in 2009. Thus, we do not expect to make any large new commitments.
The Foundation obviously knows how deeply it’s digging into its assets or it wouldn’t know how much money it has available for grants. So why hide the ball?
The Nonprofiteer wishes to suggest that a public statement by a leading foundation about what size chunk it believes can prudently be removed from its asset base would set an example for the rest of the foundation community–not to mention providing enough of a whiff of self-regulation to keep the Congress from upping the legally required ante.
So how about it? Will foundations expressing a willingness to increase their payout rates (and, again, thanks and praise be to them) also make public the new rates, and thereby Give A Lead (as the British say) to all the rest?