How Planning to Close Her Foundation’s Doors Was the Right Business Model

The first blog in a 3-part series 

When Fran Sykes, founder and president of Pascale Sykes Foundation, tells people she is purposely closing her foundation’s doors in four years as a conscientious business strategy, people seem puzzled. Why would anyone purposely go out of business?

Like many foundations, Pascale Sykes was originally established in perpetuity. She never dreamed it wouldn’t live on through generations to come. Isn’t that why people create philanthropic organizations? But in 1996, after four years in business, trustees voted to sunset the foundation in 2022—30 years after its founding. Why did Sykes, the donor, urge trustees to make that decision? 

Let’s find out from Fran Sykes herself.

When Pascale Sykes was three years old, my husband and I attended a conference that changed the foundation’s future forever. We learned there is a market for consultants whose purpose is to protect donor intent. Those consultants create videos and special directives—and even prepare legal documents—in which donors fully explain and even particularize their intent. After the donor has passed away, the consultant may continue to advise and counsel trustees.

It seems well-intended, but I saw it from another angle. What if my children don’t want to run a foundation? What if my passion, which, as you will find out, is “working low-income families, doing the right thing,” isn’t their passion? Are we saddling our children with responsibilities they would prefer to avoid? Are we preventing them from pursuing their own charitable callings? Are we controlling them from the grave?

It was at the same fateful conference that I also learned that scores of consultants thrive on “bringing the next generation on board” or “taking it to the next level.” People commonly establish foundations to serve charitable purposes and to keep the family together. Regrettably, foundations often spend charitable dollars on family team-building retreats, devising methods to reach family consensus and the like. Funds and time that could benefit society and pull next generations together are instead being spent to deal with family situations that may never have risen without the foundation.

What if we instead gave our foundation an expiration date?

Preserving intent

I was at the time, and still am, passionate about the two major points of my foundation’s intent. Pascale Sykes was formed, first and foremost, to serve working low-income families—those missed by the safety net. It serves those trying to “do the right thing” to move ahead and provide for their children, but who find it difficult to do.

Second, the foundation was founded to revise social services to consider individuals within families holistically, that is by working with not only individuals but other family members, especially adults.

I was absolutely adamant about promoting and preserving those two areas of intent. I also understood that the mission is appropriate here and now.

Maximizing impact

In 2012, ten years before our planned sunset, Pascale Sykes became fully funded. Trustees urged me to establish a spend-down plan. A committee of individuals from education, faith, research, social services, and state government met for about a year. The decision was to focus on Southern New Jersey. This area contains New Jersey’s poorest counties and fewest resources, or as we like to say, the most potential.

Pascale Sykes had for years limited awards to a few substantial long-range grants, renewed annually. We wanted each grant to make a difference. Once we became fully funded and implemented the spend-down plan, our funding policies became even more impactful. We could focus on implementing collaborative efforts, constantly evaluating and revising to better serve our target population. We could engage professionals to evaluate and publish our results. We could affect a region and bring about systemic change.

We then recognized the most important justification for closing our doors: spending all our funds could really move the needle. We could make a difference with children, families, and the entire region. Our demonstrated success could prove a model to systemically change the way services are delivered in our region, our state, and perhaps, beyond.

2018 marks the sixth year of Pascale Sykes’ ten-year plan. With four years left before her doors close, how does Fran Sykes feel about her decision? How did this path take them into new territory? What steps would need to be taken to sunset effectively? What things hadn’t they planned for? Stay tuned for the second in this three-part series on the foundation’s fascinating and powerful business model.