Time Limits
An increasingly effective tool to avoid mission drift is to impose time limits on the lifetime of the foundation or the period of time in which a charitable fund must be completely spent by the donee charity. A time limit is useful for preventing a situation in which decision makers have no actual knowledge of the donor's intentions. A time limit also avoids the institutional inertia that could cause a charity or foundation to misinterpret or disregard the intentions of the donor. Furthermore, a time limit would impose a sense of urgency on the directors and staff of the recipient organization to develop a business plan for the efficient and strategic use of the gift.
There are several significant examples of time limits, both in the context of restricted gifts and foundation administration. Most notably, the decision by Bill and Melinda Gates that their foundation will be terminated within 50 years after they have both died evinces a concern that the world's largest foundation could stray from its original mission. Even more dramatic are the restrictions that Warren Buffett placed on his gift to the Gates Foundation, requiring that each year the amount of the previous year's gift be used up by the foundation and that all the funds contributed by him be totally expended within ten years of the close of his estate for administration purposes. This also illustrates a concern that the longer a charitable organization holds a donor's funds, the more likely that its own goals, rather than the goals of the donor, will be fulfilled.
The issue of mission drift is significant, particularly for donors wishing to make large gifts to a specific charity or to a private foundation. It is important for charities and donors to work together to carry out the donor's intent. The use of these strategies to give charitable funds focus may serve not only to avoid the mission drift, but improve philanthropy overall.