03 Feb Better to spend out? The role of time-limited trusts

From Joan of Arc to James Dean we romanticise short lives. They represent clarity and purity of purpose, never witnessing decline. Likewise, we respect those who take on large singular tasks in limited time – from a sports team trying to clinch victory with minutes to go, to moonshot missions.

This research project, commissioned by Local Trust, explores the time-limited trust model in the context of the UK. The research applies ideas from US literature on time-limited trusts or “giving while living” and “moonshot” models, to UK state and private-backed trusts. The approach undertook a mixture of desk-research, interviews and roundtable discussions with chief executives and senior representatives of various time-limited trusts across the UK and US.

The main findings reveal that the motivation for public and private founders to set up a time-limited trust model are distinctly opposing. While private foundations are motivated to set up time-limited models to reduce a perpetual model into a finite one, state-backed foundations are motivated because they want more time than the three-to-five-year timescale typical of many grant programmes. What is interesting however, is that despite distinct motivations for its set-up, they tend to exhibit several common traits:

1. Goal driven funding
2. Focus on transformative system change
3. Greater appetite for risks and ’bigger bets’
4. Engaged and supportive grantee relationships
5. Focus on lasting change
6. Investment strategy focused on impact over longevity
7. Closing the gap behind them
8. Learning as legacy

Aimed at policy makers, funders and founders the research also identifies six unique lessons to consider when implementing the model:

1. Time-limited trusts can be effective when a funder or founder has specific, urgent, and ambitious objectives.
2. Time-limited trusts might be less well suited when a funder or founder is seeking to fill a gap in infrastructure or deal with persistent long-term needs.
3. Not every issue is a moonshot. The time-limited model seems to work best with a clearly defined objective and mission, but not all issues need a moonshot.
4. Is there minimum financial scale? There are many time-limited trusts of less than £5 million, but in the publicly funded sphere fixed costs make the value for money of very small time-limited trusts harder to justify.
5. Strategic knowledge building about time-limited models is a big gap. Those working in time-limited trusts understand the special dynamics and traits of the model, but often they have had to discover this for themselves.
6. Good endings are a fundamental issue, from managing grantee relationships, to archiving research and supporting staff as the organisation closes.

Download the report here