Few charities actively choose to close, yet a minority opt to do just that and "spend out" all their money on the causes of their choice. The Queen's Trust, for example, which raised £16.4m at the time of the Queen's Silver Jubilee in 1977, is now spending out what remains of its funds by 2020.
But what are the effects of such a strategy, and the difficulties of managing it? For some charities, the impact on staff can be a concern because they can foresee a time when they will be out of a job, with all the uncertainty and anxiety that can cause.
But all the organisations Third Sector spoke to said the decision to spend out had re-energised staff. Sarah Ridley, former chief executive of the Tubney Trust, which spent out and closed in 2012, says staff welcomed the switch in focus to strategic grants for specific organisations. The trust even wrote an obituary for itself to consider whether it had achieved all it wanted to.
The trust, which supported farm animal welfare and UK biodiversity, released a book after it closed in 2012 called Giving Our All: Reflections of a Spend Out Charity. It includes 10 reasons why charities should consider spending out, including addressing an immediate need; making a large, short-term impact; focusing resources and attention on specific sectors; avoiding unnecessary bureaucracy; and meeting the original aims.
Nicola Brentnall, director of the Queen's Trust, says: "For trustees and staff alike, to have the opportunity to develop and implement a spend-out strategy has been both a privilege and a great, energising challenge."
The trust provides business planning support to the organisations it funds and helps alert alternative funders to the initiatives it supports. Kate Collins, director of fundraising and marketing at the Teenage Cancer Trust, which has received two grants from the Queen's Trust worth £300,000 and £427,500, says: "It's pretty rare to know what will or won't happen years ahead of time, so this transparency gives us time to plan. The Queen's Trust is helping us by advocating for us to its networks and potential supporters. That's a very powerful endorsement, which we hope will help us secure future funding."
Andrew Purkis, former chief executive of the Diana, Princess of Wales Memorial Trust (Diana, pictured left), which ran from Diana's death in 1997 to 31 December 2012, says trusts that keep money in the bank are inevitably limited to using just the interest accumulated.
"You don't get the social returns you might if you put the money to use earlier," Purkis says. "The ripple effects you get from deploying the money quickly don't happen if you've left it all in the bank."
Many charitable foundations achieve significant long-term impact without spending out, but even considering this strategy can be beneficial. Purkis says more charities should consider whether they would be better placed to achieve permanent, positive change by spending out rather than managing the organisation for the long term.
George Hoare of the think tank New Philanthropy Capital, who is currently researching spend-out trusts, says some foundations are "too concerned about investment committees, financial returns and preserving their endowment, which distracts them from the impact of their spending and their mission". He says the focus should instead be on what that money achieves.
Writing in the Tubney Trust's book, Rene Olivieri, the chair of its board, says trustees should consider whether more good can be achieved by concentrating resources, within a fixed timeframe and very specific areas of interest or by making other, similar organisations more effective and robust.
He concludes: "Knowing you are not going to be around forever forces grant-makers not to micromanage their grant recipients, but to try to understand how those organisations work and think."