Approaches to foundation spending have too often been organized around a false choice. Foundations are expected to preserve assets in perpetuity while spending at or near the IRS-required 5% minimum, or to spend down by deploying resources over a fixed period and closing.

Both paths can be thoughtful and mission-aligned, with perpetual foundations offering long-term support across generations and spend-down foundations choosing a finite horizon rather than allowing resources to remain concentrated indefinitely. We are not arguing against either path, but asking whether treating them as the only options has become too limiting for the decisions foundations face now.

We believe there is another way.

We call this other way the “tidal foundation,” a model that lives outside the limits of perpetuity and spend down and frees foundations to think more expansively about how resources respond to mission, time, and changing conditions.

The metaphor matters because tides rise, recede, and replenish in relationship to the forces around them and the shores they touch. A tidal foundation treats stewardship not as a fixed decision about duration or payout, but as a living practice of calibration. It asks how resources should align with the communities our missions call us to support and the critical periods when increased funding can make a meaningful difference.

A tidal foundation treats a foundation’s corpus not as something to keep safely moored, but as a resource that gains purpose through movement. Capital can flow steadily, rise in periods of heightened need or possibility, and return to replenish before the next surge. Rather than constant expansion or contraction, this is a practice of disciplined responsiveness.

That responsiveness is often constrained by the assumptions around the 5% minimum. For many foundations, 5% has become a proxy for fiduciary responsibility, while spending meaningfully above it is treated as a step toward institutional depletion. Leaders and trustees may want to spend more, but financial modeling can trigger fear that increased spending means choosing a path to closure.

Read the full article about the tidal foundation by Rickke Mananzala and Carmen Rojas at The Center for Effective Philanthropy.