Source of image: online version of WSJ article cited below.
When he was discussing with Pierre Goodrich the rules for Goodrich’s Liberty Fund, my late-lamented mentor Ben Rogge tried to convince Goodrich to set some date by which the foundation would be required to spend all of its funds. Rogge would quote Smith against the practice sometimes called ‘ruling with a dead hand’ by which the dead try to put restrictions on the living. Rogge thought the dead had a right to restrict the future use of their money; its just that he thought it would become increasingly hard for them to do so effectively, the further out into the future you go.
There were at least a couple of reasons. One of them was that as you go out into the future, it is increasingly hard to make sure that those supervising the money will remain true to the donor’s intent. Another reason was that as you go further out, and conditions change, it becomes increasingly hard to know what the donor would have wanted done. (Rogge used to jest that probably, evenually Liberty Fund would end up spending libertarian Goodrich’s money on making films promoting the beliefs of communist Anna Rosenberg.)
On this issue, it appears that Bill and Melinda find Adam Smith more persuasive, than did Pierre:
The Bill & Melinda Gates Foundation said it will spend all its assets within 50 years of the death of its last trustee, a decisive move in a continuing debate in philanthropy about whether such groups should live on forever.
. . .
The decision is expected to influence other charities to consider following suit. . . .
. . .
The Gates decision will add fuel to a debate about whether foundations should live in perpetuity, a longtime model used by the Ford and Rockefeller foundations and Carnegie Corp.
For the full story, see: