Sunsetting Foundations Don’t Stick Around. But They Can Set Up Grantees for Sustainability
It was late 2022, and the sky was the limit for the National Institute for Student Success.
Equipped with 2021 seed funding from the A. James & Alice B. Clark Foundation, the NISS, which works with universities to improve student retention and graduation rates, had built its team and begun scaling its model at other higher education institutions. Demand for its services was surging, especially among universities serving first-generation and low-income students.
“It quickly became clear that they were exceeding expectations,” said Natalie Grandison, the foundation’s then-director of higher education and strategy.
The catch? In 2016, the foundation had committed to a 10-year sunset. The NISS would lose access to a vital funding source when the foundation closed its doors on December 31, 2025.
Proponents of perpetuity often — and accurately — note that if a foundation sunsets in 50 years, not only will it not be around to fund nonprofits anymore; it’ll also forgo the chance to take advantage of a compounding endowment to move a lot more money over that period than it would if it spent down. But leaders at sunsetting foundations present a compelling counterargument: What if nonprofits, buttressed by that foundation’s support, shore up their finances and thrive in its absence — particularly by building endowments letting them harness the same advantageous financial math? Key words: funding, Clark foundation, Inside Philanthropy
By Mark Scutari · NISS Content Publisher