All Good Things Come to an End: Emerging Strategic Patterns of Sunset Foundations

Abstract

Sunset foundations—foundations that exist for a limited time—are gaining increased attention in the discussion on impactful philanthropy. The idea is that having a limited organizational life span allows for greater impact. However, there is little knowledge on how leaders of these foundations navigate this sunset phase. Based on organizational development theory, we take a first step in investigating the causes that lead to the decision to sunset. We apply a multiple-case study approach to analyze an international sample of 11 sunset foundations. We find that depending on the cause for the decision to close as well as the logic through which the remaining endowment is spent down, four distinct ideal-typical sunset strategies emerge. The proposed strategic patterns refer to as Impact Accelerators, Urgency Responders, Resource Spenders, and Fade-outs. This classification adds to a better understanding of the strategic and managerial requirements leaders of sunset foundations should consider and the intended impact goals connected to a sunset.