At the end of December 2023, a resoundingly successful experiment in second-generation grantmaking came to an end when the William E. Simon Foundation closed its doors.
Established in 1967 with neither a specific mission nor a staff, the foundation was led for its first 33 years by its founder, William E. Simon, whose career history encompassed banking, private equity and public service. After Simon’s death in 2000, his seven children led the foundation until – following their father’s instructions – they terminated its operations.
In sunsetting their philanthropy, the Simon Foundation’s board became part of a growing trend among private foundations overall – and among family foundations in particular – to limit the time frame in which they operate. Philanthropic donors who reject the notion of perpetuity may choose to do all their giving in their lifetimes or may place limits on the amount of time their philanthropy continues after their deaths.
Chuck Feeney, for example, championed the concept of “giving while living” and succeeded in witnessing the distribution of $8 billion in grants by The Atlantic Philanthropies before his death in 2023. Bill and Melinda Gates have stipulated that the Gates Foundation is to complete its grantmaking no more than 20 years after their deaths.
The donors making these decisions are ideologically diverse and their reasons for choosing a limited life for their foundations also vary. For some, the opportunity to make a significant impact quickly is the overriding factor. In one of the better-known early examples of spend-down, the Aaron Diamond Foundation spent itself out of existence by 1996, 11 years after its founding.
The late Aaron Diamond and his wife, Irene, had decided to allocate all their resources over the course of one decade to have the greatest possible impact—in this case, on the AIDS epidemic. Their foundation became the largest private supporter of AIDS research in the U.S. It devoted $220 million to the New York City-based Aaron Diamond AIDS Research Center, whose pathbreaking scientific work ended up saving millions of lives.
Both Chuck Feeney and Jeffrey Raikes have spoken about the impact and great personal joy that results from seeing that impact first-hand and the motivation that joy provides to rededicate to more and wiser giving. For David Weekley, philanthropy is an act of stewardship. “For some reason, God gave me more financial resources than I need or deserve, and therefore I believe I’m supposed to be the one to give them away,” he has stated.
Many donors who time-limit their philanthropy share the above concerns but primarily wish to ensure the values and donor intent they brought to their grantmaking are maintained. Committing to having all charitable giving take place in one’s lifetime is one solution. But wise donors may also require their philanthropic assets be distributed before a firm “sunset” date.
This can be a specific year or some length of time following the donor’s death. In cases where a donor has left no such instructions, foundation boards have decided to sunset when they realize the next round of board succession will bring individuals who did not know the original donor. Both the Earhart Foundation and the Avi Chai Foundation chose this option.
The importance of protecting a donor’s values was a lesson William E. Simon, already an advocate of free enterprise and limited government, learned in the 1970s from the experiences of other philanthropists, notably Henry Ford II and John M. Olin. In a statement made upon his resignation from the Ford Foundation board in 1976, Ford noted, “The foundation is a creature of capitalism, a statement that, I’m sure, would be shocking to many professional staff people in the field of philanthropy. It is hard to discern recognition of this fact in anything the foundation does.”
Olin was already upset by campus protests at Cornell University (his alma mater and grantee). He also anticipated continued government interference in private philanthropy following the Tax Act of 1969, and worried about how the assets of the foundation he had founded in 1953 might be spent in the future.
For him, Ford’s statement strengthened his decision to sunset the John M. Olin Foundation within 25 years of his death. In February 1977, Olin asked the foundation’s board to approve his resignation as president and appoint William E. Simon – already a trustee and just coming off his term as Secretary of the Treasury – as his successor. Simon served in that position until his death in 2000.
The 23 years he served as the Olin Foundation’s president confirmed for Simon the critical value of sunsetting to protect donor intent. It also engaged him in the foundation’s mission “to provide support for projects that reflect or are intended to strengthen the economic, political and cultural institutions upon which the American heritage of constitutional government and private enterprise is based.”
Simon certainly shared Olin’s priorities. But in leading the Simon family’s philanthropy he also brought the values developed through his personal and professional experiences – “individual freedom, initiative, thrift, self-discipline and faith in God.” Those values shaped the commitment of the William E. Simon Foundation to human flourishing and its focus on strengthening individuals, families and communities for over five decades.
In 1997, Bill Simon, Jr. encouraged his father to begin planning for the foundation’s future. A new board was named which included all seven of William Simon’s children and three nonfamily members. Among the latter was James Piereson, executive director of the Olin Foundation since 1985. A more specific mission statement was developed, and the foundation began to hire staff.
William Simon said all grantmaking should cease within his children’s lifetimes, noting in a 1998 conversation with a Chronicle of Philanthropy reporter, “I don’t want it around after my children are deceased or have lost interest. I wanted a mechanism in place so that when I die, the giving will be done thoughtfully with children who are prepared to do what we all agreed on. I didn’t want to be giving money away with the idea that I had to hurry up.”
In October 2023, Bill Simon, Jr., his sister Julie Simon Munro and Sara Snider, the Simon Foundation’s executive director, graciously agreed to speak with me about sunsetting the foundation. Below is a summary of that discussion that has been edited for length and clarity.
Q: In his decision to sunset your family’s foundation, how did your father explain his reason(s)?
A: It was always about preserving donor intent. Dad spoke with us about his experience at the Olin Foundation and about Henry Ford’s resignation from the Ford Foundation board. He was aware that perpetuity frequently resulted in mission drift at foundations after their original donors died.
Q: How did he decide on the foundation’s lifespan?
A: Dad brought all his children on the foundation board several years before his death. He was teaching us constantly how he wanted the foundation to operate when he was gone. He knew us as adults, and he saw that we could work together. On one occasion he said, “I love my grandchildren, but I don’t know them.” So he wanted to sunset during his children’s lives.
Q: When did sunsetting become “real” for you?
A: It was always in the back of our minds. When Dad died in 2000, we had a lot of organizational work to do right then. The momentum for sunsetting really started in 2018.
Q: How did your grantmaking change in the foundation’s final five years?
A: Changes were slow at first but picked up with time. In 2020 we took a deeper look and Sara led our staff in making recommendations about how to distinguish between those grantees for whom we might make final grants and those for whom we should continue to provide support. We did make reductions in the number of grantees over time. We maintained our support over all our issue areas but stopped taking new proposals.
Q: How did you communicate the decision to sunset to your grantees?
A: It had never been a secret, but we began to include language about sunsetting in the specific period 2022-2024 in our 2018 grant letters.
Q: Did you introduce grantees to other potential donors?
A: It had been customary for our parents to make challenge gifts that required grantees to find other donors, and we had continued that practice. We also utilized other opportunities to introduce our grantees to some of our philanthropic networks, including Philanthropy Roundtable’s working group for Catholic school donors.
Q: What has been the most challenging aspect of sunsetting for you personally?
A: Making those final phone calls to grantees.
Q: And what has been the most surprising aspect?
A: We had a sunsetting party for the family and the final cohort of grantees, and the attendance was overwhelming.
Q. What else did you do to commemorate the achievements of the foundation?
A: We arranged for Caroline Hemphill to write a history of the Simon Foundation which was published in 2023 and distributed on a limited basis. Cary had worked for 20 years with our father in the private sector and at the Olin Foundation. Copies of the book have also been placed in our father’s archives at Lafayette College. In addition, we commissioned a video which includes wonderful clips of our Dad along with reflections from all the siblings, other foundation board members and several of our grantees.
Q: What will you miss most without the family foundation?
A: We will continue our charitable giving individually – and sometimes collaboratively – but we will miss the opportunity for the siblings to work together with our staff and other board members on a regular basis on something that has been so meaningful for us over 23 years. We estimate that the foundation’s work has affected over 10 million people, and we are deeply grateful for the gift our parents gave us.
Philanthropy Roundtable’s donor services help givers protect their charitable intent. Learn more about this topic through our donor intent resources.
