4 ms·
I agree with you, but many people see that as a plus when donating. If I give $x to an organization that desperately needs it, it will be spent immediately. I
by nostromo 11y ago
I agree with you, but many people see that as a plus when donating.
If I give $x to an organization that desperately needs it, it will be spent immediately. If I give $x to an endowment, it will sit there in perpetuity, providing investment income to the organization for decades or centuries.
Ben Franklin understood this and left a small amount of money (1,000 pounds) to the cities of Boston and Philadelphia in his will, instructing that the funds not be used for 200 years.
http://eddiethompson.org/2012/09/30/franklin_endowment/ http://eddiethompson.org/2012/09/30/franklin_endowment/
- Cacti 11y agoNot to be flippant, but, it's a good thing Ben Franklin wasn't born in Zimbabwe!
- Houshalter 11y agoBack then money was based on precious metals, not monopoly money. Although Early America did have problems with hyperinflation from war debts. Anyway the point is the money is invested, so it's not literally just cash sitting in a vault, but is earning itself interest.
- justincormack 11y agoThe point is that interest does not always cover inflation. The fact that money was gold or paper back then makes no difference. Invested money can be lost.
- Houshalter 11y agoWith a currency backed on gold there is no such thing as inflation. And in fact money tends to increase value over time, as the economy grows. Of course invested money can be lost, but on average it grows. The expected value of investing is almost always positive.
- tanderson92 11y agoAnother good story and an excellent piece of reading on long-term trust funds (Methusaleh Trusts) was in Lapham's: http://laphamsquarterly.org/future/trust-issues http://laphamsquarterly.org/future/trust-issues