AS nonprofit institutions have seen donations and investments grow spectacularly in recent years, the urge to keep the money rolling in is being supplemented by a new pressure: make it flow out faster.
Politicians, consultants, watchdog groups and even some philanthropists say that foundations, universities, museums and other charitable institutions often spend only what they must while their coffers expand, partly because of double-digit returns on investments. These “spend it sooner” proponents say that the minimum that private foundations are required to give — 5 percent of their assets each year — has in many cases become the maximum. To really attack social problems, they say, foundations and other nonprofits need to open their spigots much wider.
“There are certain dynamics that take over in terms of behavior, and one of those forces is usually the drive to perpetuate institutions,” said Warren E. Buffett, who is giving more than $30 billion to the Bill and Melinda Gates Foundation with the stipulation that it be spent promptly. “That dynamic — though undoubtedly subconscious — sometimes takes precedence over considering what might be best for society.”
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