Nearing the End of a 10-Year Sunset, This Family Foundation Will Have Awarded .3 Billion

Nearing the End of a 10-Year Sunset, This Family Foundation Will Have Awarded $1.3 Billion

Alfred James Clark, born in 1927 and trained as an engineer, was a major contributor to the construction of modern Washington, D.C., and growth of surrounding areas as chairman and CEO of Clark Enterprises, the holding company for the Clark Construction Group. Under his leadership, the firm grew to become one of the largest building and infrastructure companies in the U.S.

Along the way, Clark, who died in 2015, and his wife Alice established the Bethesda-based A. James & Alice B. Clark Foundation, with a focus on engineering education, veterans and organizations in the Washington, D.C., region. As the years went on and Clark enjoyed greater professional success, he began to think more about his philanthropic legacy, often speaking with other individuals who established and ran family foundations.

In 2010, Clark, then in his early 80s, decided the foundation, launched in 1987, would sunset. “He fully believed that today’s money should solve today’s problems,” said Clark Foundation President and CEO Joe del Guercio. “He also didn’t want to worry about who was running his foundation 50 years from now, and if those individuals would be aligned with his values and ideas.” 

Del Guercio, who worked with Clark after joining Clark Enterprises in 2004, assumed leadership at the foundation in 2015 to help the board develop a spend-down strategy. When Clark passed away in March of that year, Forbes pegged his net worth at $1.4 billion, and a large portion of his estate was transferred to the foundation. The following year, the foundation announced it would spend down by the end of 2025. 

And what a spend-down it is. When all is said and done, the foundation will have moved $1.3 billion to 400-plus organizations over 10 years — a feat that required del Guercio to dramatically increase his staff, network with leaders at other sunsetting foundations and thoughtfully prepare grantees for a world without the A. James & Alice B. Clark Foundation.

“It’s a different way of thinking about due diligence and relationships,” del Guercio said of engaging with grantees in a spend-down context. “It requires working with organizations to strategically think about the long term. It’s difficult and it takes time, but once you do it, they are in a much better place than they were before.”

Staffing up

After formalizing the foundation’s spend-down strategy, del Guercio dug into an extensive to-do list. In 2016, the foundation established its legacy program, Clark Scholars, which provides financial assistance, academic support, mentorship and leadership development to roughly 500 engineering undergraduates at 11 universities, including Duke University, the University of Maryland and Georgia Tech.

At that time, the foundation’s staff consisted of del Guercio and another individual, plus a three-person board, with the Clarks’ daughter, Courtney Clark Pastrick, serving as chair. Given the foundation’s ambitious plans, del Guercio had to staff up to procure what he called “40 to 50 years of experience” to shepherd the 10-year spend-down. 

Clark Foundation Director of Communications Sarah Elbert came aboard in 2019. She sat in on my conversation with del Guercio and recalled how he made the pitch. “He said, ‘This will be an amazing challenge, especially given the size of the portfolio you’ll be working with. And you’ll be out of a job in seven or 10 years.’”

Here, Elbert encapsulates a challenge facing all sunsetting foundations — informing existing or new employees that the position has an endpoint. In Elbert’s case, the timeframe del Guercio laid out was appealing. “Coming from a political background where nothing was longer than six months, seven years was a long time,” she said. “I remember saying, ‘I’ll consider it,’ but I was thinking, ‘Where do I sign?’”

Other individuals found the offer to be appealing, as well. Del Guercio increased the foundation’s staff to 11 people over the following eight years, “which is still incredibly lean, when you look at the size of the foundation and the timeframe,” he said.  

Del Guercio also had some help along the way. As a member of the National Center for Family Philanthropy’s Strategic Lifespan Peer Network, a resource for staff, board members and family members at family foundations who are spending down or considering doing so, he talked with individuals who were facing common issues, like how to best support staff throughout the process. (I spoke with the center’s Director of Programs Daria Teutonico about the network last year, and her team subsequently put me in touch with del Guercio and Elbert.)

That said, the feedback could only go so far. “I have yet to find another spend-down that’s been this big, this quick,” he said. “So sometimes, it felt a little lonely with regards to figuring out the best way to do it.”

A different kind of engagement

Del Guercio used a baseball analogy — “sprinkle the infield” — to describe its pre-spend-down grantmaking approach. “We gave away the regular 5%,” he said, “and it was mostly $25,000 to $50,000 checks to different organizations around D.C., with the occasional larger investment by Mr. Clark in something he was interested in, usually around education.”

Moving over $1 billion out the door in 10 years changed this calculus. First, there was a psychological component. Foundation staff continually had to remind skittish grantees that the spend-down would take a decade. “At first, everybody heard we’d be spending down, but nobody heard the 10 years part,” del Guercio said. “For nonprofits chasing $25,000 to get them through the next six months, 10 years was like an eternity.”

The foundation’s sunset also galvanized a profound shift in how staff engaged with grantees. Conversations shifted from focusing on short-term needs to more strategic, long-term planning. Staff talked to organizational leaders about their ability to absorb a large gift, the acumen of development staff and if the board had a succession plan in place should a key leader step down.

This was unfamiliar terrain. “Things like the succession plan question was a conversation many organizations didn’t have internally, let alone with a funder,” del Guercio said. But these kinds of questions weren’t intended to be deal-breakers. Instead, they aimed to get nonprofit leaders to think beyond the year-to-year grant application treadmill and “flip the script to make room for a more trust-based approach.”

Helping organizations become self-sustainable

The results of these conversations were also quite different from what organizations had come to expect. The unrestricted grants were considerably larger and framed as what del Guercio called “strategic investments that can change the dynamic of that organization.”

Del Guercio joined Clark Enterprises 20 years ago to help the company grow its venture capital and private equity operations before becoming its president and CEO in 2023. When he uses the term “strategic investments” in the context of grantmaking, he’s speaking from experience. 

“If you’re a funder and you’re doing the work to understand an organization and make the greatest impact as soon as possible, why would you give them $1 a year for 100 years?” he asked. “You’re better off giving $100, and I think you’ll find that the upfront investment will create a greater impact, and have an equal, if not greater effect on your legacy.”

The key phrase there is “doing the work.” The foundation’s extensive due diligence presented situations where some leaders, operating in a trust-based environment, told staff they weren’t ready for a large spend-down grant. In these cases, the foundation provided the organization with a strategic planning grant and put leaders in touch with a consultant to help them refine their approach. “If that work was done well and we were in the right place, we provided that investment,” del Guercio said. “But sometimes, it didn’t work.”

Advocates for perpetuity argue that a foundation needs to stick around forever to provide grantees with consistent financial support. If the funder goes away, the thinking goes, grantees will be faced with a drop in incoming revenues and their missions will be in peril. 

Del Guercio doesn’t see it that way. “In some ways, it’s a disservice to have an organization reliant on you for perpetuity,” he said. “I think of it like we are helping these organizations build muscle to become self sustainable and more effective over the long term. And that’s hard to do.”

Eight years after del Guercio started staffing up his team to meet the foundation’s spend-down timeline, the numbers are stunning. Since 2016, the Clark Foundation has committed over $438 million toward expanding access to an engineering education (including for the Clark Scholars program mentioned above); over $338 million to D.C.- area organizations; over $131 million for veterans’ education, healthcare and family support services; and over $201 million toward legacy investments, like grants to faith-based schools and organizations in Clark’s hometown of Easton, Maryland.

The foundation will officially shut its doors at the end of next year. But with the end in sight, leaders at grantee organizations no longer shudder at the term “spend-down.” “They told us that it was a difficult transition to go through,” del Guercio said. “But now that they’ve done it, they said it was the best thing that ever happened to them.”

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