Staying in business is a preoccupation for most organizations, but not for the Atlantic Philanthropies, a large private foundation dedicated to improving the lives of the disadvantaged and other vulnerable people. In 2002 Atlantic decided to spend its entire endowment—nearly $4 billion—before 2020. Its move reflects a belief in "giving while living" and the conviction that when it comes to social impact, money spent today is worth more than money saved for tomorrow. Although such ideas aren't new to philanthropy, the decision to take them to their logical conclusion and shutter a foundation is rare. After all, perpetual foundations can refine where and how they invest in order to ensure that they meet changing social needs for generations—and make huge financial and social contributions as a result. Moreover, the challenges associated with such a radical exercise in change management are daunting.
Atlantic found that its decision ultimately affected its choice of grantees, approach to grant making, and organizational structure.1 To be sure, the decision to spend down wasn't made in isolation; it was influenced by two other noteworthy events: the formal abandonment of the foundation's practice of anonymous giving and an emerging effort to refocus the grants.2 These...