(Illustration by Chris Gash)
When famed investor and philanthropist Sir John Templeton passed away in 2008, he left behind approximately 1,000 pages of text across 15 essays and books. He intended the documents to guide the stewards of the Templeton World Charity Foundation over the long haul. “Now and for centuries to come, the Founder’s purposes are to help humans grow in humility and to grow in enthusiasm for research and discoveries,” he wrote in its memorandum of association.
The guidance conveyed over these many documents forms the core of Templeton’s donor intent. Such documents, enshrining the wishes and intentions of donors, are central to the social contract that sanctions philanthropy. This social contract carries obligations such as a minimum payout and the requirement to serve public charitable purposes. For the donor, it guarantees rights like tax incentives and freedom to give according to the donor’s intentions. The matter of donor intent is particularly important as we embark on an estimated $68 trillion intergenerational wealth transfer over the next 25 years that will mint a new generation of philanthropists.
Donor intent centers on three questions: What constitutes appropriate charitable purposes? How are the wishes of donors upheld? And how do we account for a changing world? In 1601, the English Statute of Charitable Uses defined which purposes were deemed to be charitable, established commissioners to ensure that charities were properly run, and set the conditions under which courts could deviate from donor intent. A will could be altered only if the donor’s wishes were determined to be illegal, indefinite, or impossible to achieve. Against these guidelines, charities and foundations have been free to function as voluntary, private entities for 400 years.
Skeptics have challenged the wisdom of this social contract. In 1880, Victorian reformist politician Sir Arthur Hobhouse asked in his provocatively titled The Dead Hand, “There may be times of awakened conscience and active exertion, but the question is whether rich Foundations derived from private origin do not invariably gravitate toward sloth and indolence?” Hobhouse proposed eliminating perpetual charitable trusts entirely.
More recent (and less drastic) reform efforts include increasing payout requirements, limiting payments to family members, and stricter regulation of governance. Some critics also want to limit donor intent. Philosopher Barry Lam of Vassar College, for example, argues that adherence to donor intent is an immoral practice that gives undue preference for the dead over the living.
While some proposals merit careful consideration, attempts to weaken the integrity and durability of the donor’s intent are mistaken. On the contrary, a deep understanding of donor intent is essential for successful, creative philanthropy today. In my time as president of the Templeton World Charity Foundation, I have found that our founder’s intent—and ample words—have helped us in numerous ways, from preventing mission creep and maintaining a long-term perspective to encouraging creativity and risk-taking in our grants.
The Centuries-Long View
Clear written guidance helps management and trustees build a coherent picture of the donor’s underlying worldview. “Intention” comes from the Latin intendere, one meaning of which is “to stretch toward.” In this sense, donor intent is about aspiration and the future, not the past. It enables the application of a core philosophy or perspective to new circumstances unanticipated by the donor. A donor’s intent also need not track his or her actions when the donor was alive. Intention gets at the motivations and philosophy of the donor; it isn’t just a list of projects funded in his or her lifetime. “Templeton’s donor intent is an elastic fabric,” one of our trustees recently said. “What you make is up to the judgement of management and trustees.”
Templeton believed in the expansiveness and mystery of the human condition and in the search for meaning, purpose, and truth. In his 2000 book Possibilities for Over One Hundredfold More Spiritual Information, he asks many provocative questions: “Is creativity accelerating? Is there any reason to think that this new world of mind and free will must be the end of progress? Does the new vista massively amplify possibilities? What unexpected aspects of reality will emerge next?” He expressed this deepening understanding of our place and purpose in the universe in various ways: spiritual progress, humility in theology, and a humble approach, among other turns of phrase. Together these descriptions offer a profound statement of intent, and Templeton intended for the foundation to pursue this quest for centuries. After all, no one sets out to find the meaning of life in a couple of years.
This centuries-long view informs how our foundation makes short-term plans and decisions. For example, our five-year strategy focuses on identifying potential innovations for human flourishing, which we believe may take many decades to come to fruition. Human flourishing encompasses many dimensions of physical, mental, social, and spiritual well-being. Flourishing connotes growth, resilience, and progress. We are committed to promoting positive aspects of human life, as opposed to trying to fix specific problems such as a particular disease. Consequently, we do research on things such as forgiveness, social connections, intelligence, moral decision-making, and consciousness. The common thread is a belief that science can enhance our understanding of these critical components of holistic flourishing. Unlike medical or technical breakthroughs, these individual capacities can only be nurtured and cultivated over a life span, if not over many generations.
Whether because of peer pressure, lack of discipline, or organizational turnover, too many private foundations get drawn into a morass of trendy social causes. Donor intent acts as a bulwark against such groupthink. For example, instead of directly tackling understandably important issues like cancer care or carbon sequestration, we invest in approaches to enable human beings to be at their best. You won’t find a United Nations Sustainable Development Goal on forgiveness, but we believe that effective, practical tools that support people on their journey of forgiveness have multiple, transformative benefits.
More simply, many foundations are dedicated to worthy causes such as vaccine research or ending food insecurity, but there is very little funding for research on vital human traits such as forgiveness or collaboration that could help us accomplish those goals. Templeton’s writings allow us to explore such underdeveloped areas, particularly around social and ethical issues that may take decades or centuries to develop.
This knowledge helps us seek long-term, ambitious projects while setting aside short-termism and pressures to accelerate giving above a sustainable level. At this scale, the desirability of flexible guidelines becomes obvious. One of Templeton’s essential documents is simply a list of questions, which help us examine our assumptions and think creatively as the world changes over time.
Encouragement to Risk
A clear understanding of donor intent also makes risk-taking easier. As Stanford University political scientist Rob Reich has noted, because foundations can operate on such a long time horizon, one of their core purposes should be to take risks on “social policy experimentation and innovation that we should not routinely expect to see in the commercial or state sector.” A good example of how donor intent enables strategic risk-taking is in our Global Innovations for Character Development initiative, which aims to fund scientifically sound innovations that promote and measure character development.
In this portfolio we require the grant to go directly to an institution in a lower- or middle-income country. By contrast, almost 90 percent of funds in global philanthropy run through intermediaries who exact overhead costs and serve as middlemen to those who actually do the work on the ground. Grantmakers typically see the small administrative infrastructure of institutions in such countries as a risk. But Templeton had an explicitly global perspective that has encouraged us to take these perceived risks. Two of his works, The Essential Worldwide Laws of Life and Wisdom from World Religions engage with the great storehouses of human knowledge and insight without regard to creed or nation. Our founder’s words and expansive worldview help us take informed risks in the pursuit of innovations to enable human flourishing.
Of course, it’s easy to praise donor intent in theory but far harder to follow it in practice. The real world is messy, and even the most carefully crafted documents can struggle to account for that. Sometimes change is needed because our society evolves for the better. Both my wife and I were awarded Rhodes Scholarships—a perfect example of an institution that desperately needed change when it finally allowed women in 1977. Changing Cecil Rhodes’ trust required an act of Parliament. Thus a legal change to his instructions enabled a greater fulfillment of his intent to use the scholarships as a means to “fight the world’s fight.”
Sir John Templeton’s future-minded and sophisticated framing of his intent may be an exception, if judged by historical standards. Yet, given the forthcoming massive intergenerational transfer of wealth, perhaps his approach to donor intent should become more of the rule. Thinking carefully about a donor’s intent provides incentives for donors to give, while also ensuring that future trustees and managers have the freedom to act creatively, take risks, and adjust to meet the challenges of a changing world.
New philanthropists just beginning to deliberate about how to allocate their money should heed several important lessons from our experience at Templeton World Charity Foundation. The first is to record their intent. While this does not have to be as voluminous as Templeton’s writings were, a rigorous writing process will serve not merely to document one’s wishes, but to clarify what they are and what their implications will be in the future. Likewise, philanthropists should think less in terms of specific instructions, which can become distorted by changing circumstances and mores, and more in terms of underlying values and principles. And finally, they should consider how decision-making mechanisms and processes can account for a changing world.
Just as a sonnet needs the strictures of meter and rhyme to perform its peculiar magic, a foundation—big or small—requires the inspiration and guidance of its founders for direction. While we shouldn’t follow that intent slavishly, we should recognize it for what it is: an essential tool for creating a better world.
Read more stories by Andrew Serazin.