In an article in Fortune magazine covering the Bernard Madoff scandal, writer Mitchell Zuckoff drops in an illuminating tidbit about "charitable foundations."...Federal law requires foundations to spend 5% of their funds each year on good works and administrative costs. Some foundations exceed that requirement in times of need, such as post-Hurricane Katrina, and some are designed to spend themselves out of existence over a set period of time. But most foundations closely adhere to the 5% rule. By doing so, they offer their creators the prospect of philanthropic immortality. As long as a foundation's principal earns 5% a year - not always possible in a given year, but a reasonable goal over time - a foundation endures, and so does its sponsor's vision...
But, keep in mind, 5% of a billion dollars is still quite a chunk of change.
FYI -- The largest foundations in the United States are dominated by those tilted towards the financing of leftist causes. The top ten (using 2004 figures):
1) Bill and Melinda Gates Foundation ($28.8 billion in assests)
2) The Ford Foundation ($11.6 billion)
3) J. Paul Getty Trust ($9.6 billion)
4) The Robert Wood Johnson Foundation ($9 billion)
5) Lilly Endowment Inc. ($8.6 billion)
6) W. K. Kellogg Foundation ($7.3 billion)
7) The William and Flora Hewlett Foundation ($6.5 billion)
8) The David and Lucile Packard Foundation ($5.3 billion)
9) The Andrew W. Mellon Foundation ($5.3 billion)
10) Gordon and Betty Moore Foundation ($5 billion)
