Bill Gates' decision to have his foundation shut down by 2045 isn't the norm. John MacDougall/AFP via Getty ImagesBill Gates, Jensen Huang and many of today’s tech titans have two things in common with Gilded Age robber barons like John D. Rockefeller and Andrew Carnegie. After playing a role in propelling the U.S. economy to new heights, they established massive foundations. The foundations are usually designed to last for eternity. Gates is a rare exception in that he decided in 2025 to empty the coffers of his foundation by 2045.
As I have explored in my research about American philanthropy, foundations are typically created and managed so that they might last forever by making sure that their grants and spending equal no more than the growth of their assets over time.
But I see a big problem with having foundations outlive the donors that endow them with funds in perpetuity. Society’s needs always change, while many foundations’ missions are intended to satisfy a specific need that’s not eternal.
Milton Hershey
Perhaps the best example of this problem is the Milton Hershey School Foundation.
Milton S. Hershey and his wife, Catherine Elizabeth Sweeney Hershey, established it in 1909, after he made a fortune by mass-marketing chocolate bars and other confections. They endowed the foundation initially with 486 acres (2 square kilometers) of land. In 1918, Hershey transferred stock of his chocolate company, valued at US$60 million – the equivalent of more than $1.3 billion today – to his foundation for the education and housing of orphans in a boarding school.
The Hersheys chose this mission at a time when caring for orphans and children in destitute families in institutional settings was still the norm. But by the 1920s, orphanages began to fall out of favor among educators and psychologists.
As orphanages closed, more orphans and low-income children were entrusted to the care of foster parents in private homes. And the Hersheys’ foundation, which was created in perpetuity, quickly became obsolete. And over time, its purpose repeatedly changed.
Originally, the school only educated low-income white male orphans. In 1968, it began to admit African American boys. In 1977, girls were allowed. In 1976, new rule revisions made it possible for “social orphans,” meaning children of single or divorced parents, to be admitted.
The school also pivoted from preparing students for work in agriculture and trades to college preparation. These changes were guided by a legal doctrine known as cy pres, which requires that any changes to a foundation’s mission have to adhere as closely as possible to the donor’s original intent.
After making a fortune in the chocolate business, Milton S. Hershey founded a boarding school that is still funded by the foundation he endowed more than a century ago.
Bettmann via Getty Images
These changes have helped the school carry on, but they also have kept outlays lower than the budget. As a result, it has more money than it can spend to further its mission. Its endowment had topped $23 billion as of 2024 – the largest for any K-12 private school in the United States. It’s a curious problem.
Despite spending about $90,000 on each of its 2,100 students, the foundation still runs an annual surplus of more than $850 million.
The cy pres doctrine prevents it from redirecting funds to other institutions, such as nearby public schools, or related purposes, such as college scholarships for low-income students.
More broadly, the application of this legal doctrine is haphazard. In 1963, the Hershey foundation was permitted to spend $50 million on funding a medical school for Penn State University. In 1999, a petition to spend $25 million for the founding of a training facility for teachers who would instruct at-risk children was denied.
It appears that the Milton Hershey School Foundation is stuck because its mission cannot be adjusted to the needs of society.
La Verne Noyes
The La Verne Noyes Fund is another example of a philanthropic institution dedicated to a mission it outgrew, as I discussed in my book on college affordability.
Chicago businessman La Verne Noyes made a fortune in manufacturing steel windmills that were used to pump groundwater on farms across the Midwest. He established in his will the La Verne Noyes Fund in 1919 with $3.5 million – the equivalent of nearly $68 million today. The fund’s mission was to provide college scholarships to students who had served as soldiers in World War I and their descendants.
Noyes insisted that the selection of potential scholarship recipients should not consider race, gender, political conviction or religion. This approach made the foundation very progressive and inclusive compared with its peers. By the end of the 1920s, the fund was supporting hundreds of college students enrolled at 56 colleges and universities across the nation.
In 1937, the national La Verne Noyes Fund was dissolved. Its remaining assets were transferred to 46 schools, which were tasked with creating their own La Verne Noyes endowments that were tasked with following the original mission.
These endowments still operate today according to the rules that Noyes prescribed in 1919. Their higher education scholarships are slated for descendants of soldiers who served in the U.S. Army during World War I, regardless of their race, gender, political conviction or religion.
Over time, though, that mission has grown less inclusive. More than a quarter of Americans today have no ancestors who lived in the U.S. before 1945, and many of the people whose ancestors arrived later came from Asia, Latin America or Africa.
Because of their arrival after WWI, their descendants will forever be ineligible for these scholarships. By privileging the descendants of Americans who came to this country long before that war, it mainly helps students who are white and Christian.
The cy pres doctrine allows changes only when endowments or foundations can no longer carry out their mission, which isn’t the case here. And if it ever were, any changes would need to be informed by the original donor’s intentions.
Changing the La Verne Noyes endowments’ mission is legally impossible since it can still be carried out – there are still plenty of students qualifying for them – and the endowments are financially sound.
Julius Rosenwald
Like Hershey, Chicago businessman Julius Rosenwald made his mark as a major philanthropist who emphasized giving low-income African American children access to education with the money he gave away. But he didn’t believe that foundations should last forever.
A businessman who made his fortune by owning and running the Sears, Roebuck and Co. retail giant, Rosenwald issued a warning to fellow donors in “Principles of Public Giving,” an essay the Atlantic Monthly published in 1929: The problems in society that philanthropy can help solve change over time. Accordingly, he argued, foundations should have limited lifespans.
Rosenwald set an example with his own giving.
In 1917, he incorporated the Julius Rosenwald Fund, which supported building schools for African Americans in 14 Southern states with segregated school systems. In its charter, he insisted that this foundation exist only for a reasonable period of time. Later, Rosenwald decreed that the foundation should close its doors 25 years after his death, which it was, ahead of schedule, in 1948. Rosenwald had died 16 years earlier.
Graduates of a Rosenwald school in Maryland meet up there after its restoration in 2015.
Nikki Kahn/The Washington Post via Getty Images
Few expiration dates
Rosenwald campaigned for limiting the lifespan of foundations at a time when many foundations were established. About 50 with assets of at least $1 million were formed from 1890 to 1930. Most donors insisted in their foundations’ charter that their charitable institutions should exist for eternity.
There were, however, a few exceptions. Rockefeller’s General Education Board, which was incorporated in 1903, closed in 1964. The Rockefeller Foundation, which was incorporated in New York state in 1913, was, by contrast, established for eternity. It still has $6.4 billion in assets.
In short, despite occasional deviations from the script, most foundations have lacked expiration dates.
The last time Congress took steps to significantly change laws that apply to foundations was in 1969, when a tax reform package introduced the requirement that all foundations disburse or spend at least 5% of their assets every year. When some lawmakers sought to force foundations to shut down after no more than 40 years, a survey of 85 wealthy donors found that such a rule would make them much less willing to create foundations.
That survey’s results suggest that when wealthy people created foundations back then, they wanted them to exist forever. I hope that more of their contemporary counterparts decide to take a different approach.
One promising sign is how billionaire investor Warren Buffett is handling his philanthropy. He previously made massive gifts to the Gates Foundation, which will sunset in 2045.
Now, he is pivoting: Buffett announced on July 14, 2026, that he or his estate would donate another $140 billion by the end of 2034 to the four foundations his sons and daughter run. He had said earlier that he wanted the foundations to empty their coffers within a decade of his death.
Thomas Adam does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.