All About Estates

The Perpetual Debate over Endowments


Charitable endowments are having a challenging moment.  Despite the historical success of this medieval European charitable fund structure, the accumulation of capital for public benefit has always faced controversy.  Endowments, which focus on long-term public benefit, have a built-in tension between capital and annual spending.  Does the capital exist to provide steady future good, or could it be used better now? 

Canadian Context

Canadian private and public foundations hold assets of over $100 billion.  Almost half of that total sits with the MasterCard Foundation. This capital base grew more than 300% in the last 12 years.  In response in 2022, the disbursement quota in the Income Tax Act increased from a 3.5% payout rate to 5% for assets over a million dollars.  A Senate Committee said assets held by foundations with donor advised funds should not “languish”. Activists have called for “decolonizing philanthropy” – an argument for the redistribution of implicitly ill-gotten charitable wealth.  

The Perpetuity Problem

Endowments and perpetuity are paired liked bacon and eggs.  The perpetual endowment. A charitable fund that exists forever.  Or aspires to exist forever.  This is the strength of endowments and also the problem. 

The concept of perpetuity made more sense when charitable trusts were first invented. Charitable trusts invested in land, which was part of the land-grant universities in Europe and the US.  This separated capital (the land) from the annual income the land produced.  A country estate and its underlying land produced income for charitable purposes.  In this context land is forever – and, in the thinking of the medieval aristocratic order would never be sold or broken.  The idea of perpetuity arises from a feudal tradition.

When that tradition started to break down, accumulated charitable capital came under attack. Momentous societal change inspired backlash.  The backlash produced a pivot point in the control of property held for public good.  Why?  The usual reason are religion, politics and inter-generational conflict.  But the public critique focused on the idea that there was too much accumulated capital charitable and insufficient public benefit.  Perpetuity is a long time to wait in a society calling for immediate change.

History has some juicy examples of the backlash.  In England in the 16th century, the Tudors seized religious institutions, destroyed buildings, and redistributed the land – largely for their own benefit. The French Revolution triggered similar changes with the destruction and nationalizing of monasteries and church lands.  In the early 19th century the trend continued, especially as a driver of urban renewal.  (Barcelona is a prime example.)  Mortmain is an English charity law term meaning, from the French meaning “dead hand”.  This means not just restrictive trust conditions left by dead donors, but more fundamentally charitable property that is not providing charitable benefit in the moment.

From Land to Investments 

Over time, land-based charitable trusts were replaced with modern financial instruments: bonds, stocks or other investible assets.  This is particularly a development of the last 60 years – in other words, very recently.  Modern finance and capitalism offers more upside but less coherence than land.  The binary world of capital and income shifted to total return and rolling fixed payouts.  Modern portfolio theory replaced estate agents.  

There is financial upside to these investment structures and products, but securities are a core feature of modern capitalism. To some critics, endowments are just an extension of capitalism. Capitalist wealth just switches pockets – from private to public.  The skeptics view endowments as an example of excess accumulated wealth and continuing inequity.  The needs of the present are seen as uniquely pressing and existential. To critics, perpetuity just makes endowments more egregious.  Perpetuity gives the middle finger to the urgent needs of NOW.  In this world view, the needs of the present must take precedent.  


There is a counter argument that is both philosophical and practical.  Arising from trust law, there are different classes of beneficiaries.  There are current beneficiaries and future beneficiaries. A trustee needs to be evenhanded and balance these competing interests. Capital needs to be stewarded and its benefits shared among beneficiaries. This approach focuses on an ends test: the public benefit.  It doesn’t get bent out of shape about value of the endowment or the investments.  From this perspective capital is positive because of what it does – both now and in the future.  Well-stewarded capital represent an investment in future good without 

Seven Generation Stewardship

Recently I had a conversation about endowments with Sky Bridges the CEO of The Winnipeg Foundation.  Sky is Métis and his view is informed by indigenous thinking. He asked me, rhetorically, why some foundations seem to be uncomfortable with their own endowments.  Some First Nations, he said, invested their wealth in local business for shared success.  Sky said his foundation’s investment timeline was seven generations or 140 years.  It’s a down to earth concept and more defined than the never-never land of perpetuity. It is a concept that focuses on inter-generational community responsibility and care.  It is a more organic, realistic version of trust law.  They are different in style and form, but similar in aspirations. 

Competing Demands

The competing demands of current and future good aren’t going away any time soon. It’s an eternal debate – and it’s getting louder.  The present build up of charitable property may be pushing us to a historical pivot point. Or it may challenge us to think like stewards and accept the challenge of providing benefit to at least seven generations. Or we can adopt multiple strategies and timelines in the name of evenhandedness.  Only time will tell.

About Malcolm Burrows
Malcolm is a philanthropic advisor with over 30 years of experience. He is head, philanthropic advisory services at Scotia Wealth Management and founder of Aqueduct Foundation. Views are his own.


  1. Joelle Adelson

    June 15, 2023 - 1:20 pm

    Excellent article but please edit before publishing next time.

    • Malcolm Burrows

      June 16, 2023 - 1:20 pm

      Thanks for the comment Joelle. Both the support and typo note. It was a blog written on planes, trains and automobiles. I have now done that edit. Malcolm

  2. Elena hoffstein

    June 15, 2023 - 1:23 pm

    Always a pleasure to read your blogs. As a former English literature major steeped in medieval literature and history I appreciated your look back to the history of these concepts

    • Malcolm Burrows

      June 16, 2023 - 1:18 pm

      Elena – Thanks for your comments and encouragements of my historical approach. Malcolm

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