The vast majority of large foundations operate with the intent of lasting forever and therefore rarely exceed the minimum spending ratio of 5% (calculated on an organization’s asset value of the previous year) which they need to retain tax-exempt status. According to data compiled by Buffett’s staff, 28 of the 30 largest foundations paid out less than 5% of assets in grants in 2005. (They reached the 5% threshold by counting operating costs).
