The Diana, Princess of Wales Memorial Fund has been able to take more risks and achieve greater impact by choosing to spend all of its funds rather than attempt to operate indefinitely, according to Lady Sarah McCorquodale.
McCorquodale, sister of the late princess and president of the fund, gave her views to mark the publication of a new guide that explores the longevity of charitable foundations.
Perpetuity or Limited Lifespan: How do charitable foundations decide their longevity? was published last week by Coutts, the private banking division of the Royal Bank of Scotland.
It features case studies of organisations that have grappled with the issue of whether to spend down their funds or to spend only the interest earned on their investments.
The Diana fund, which has distributed more than £100m since 1997 and will close at the end of the year, is among the case studies.
McCorquodale said in a statement: “We felt that by adopting a targeted, time-limited approach, the fund would be in the best position to maximise its impact as a funder.”
“Becoming a limited-life organisation has allowed the fund to take more risks and work in ways that might not otherwise have been possible.”
“I also think the targeted work undertaken by the fund has been a powerful catalyst for long-term change. That might not have been the case had we sought to extend our existence over a longer time period.”
Stephen Pittam, trust secretary of the Joseph Rowntree Charitable Trust, which was established in 1904 and now exists in perpetuity, says in the guide that the Rowntree trust benefits from being able to take a “long view”.
The merits of limited lifespan and in perpetuity foundations were debated last week at a Coutts Forum for Philanthropy, at which the guide was launched.
Lenka Setkova, director of philanthropy services at Coutts, said the issue had been debated more in recent years because of the visibility of philanthropists, such as Sir David Sainsbury and Bill Gates, who have committed to either ‘giving while living’ or to disbursing their philanthropic assets during a specific time period.
“There are advantages and disadvantages to both options,” said Setkova. “The key challenge is to ensure that all philanthropic resources are leveraged to maximum effect.”