Dan Tuttle, Director of Health, Stupski Foundation
Sulma Gandhi, Hawai’i Health Program Officer, Stupski Foundation
Interviewer: Maya Schane, Grantmakers In Health
In this interview, Grantmakers In Health’s Maya Schane spoke with Dan Tuttle and Sulma Gandhi of the Stupski Foundation about the foundation’s spend-down strategy and acceleration of grantmaking in 2025 in response to federal policy changes. This interview has been edited for length and clarity.
Tell us about the Stupski Foundation’s history and mission.
Dan Tuttle: Larry and Joyce Stupski endowed the foundation decades ago, and for years they worked as an operating foundation on K-12 education reform nationwide. Unfortunately, Larry was diagnosed with prostate cancer, so for that reason and others, they chose to close the foundation at the time. A few years after Larry passed, Joyce decided to reopen the foundation with the remaining assets, partly in Larry’s legacy. One of the three goals she outlined was serious illness care and end of life care, because she recognized how challenging Larry’s battle was, despite their resources. She knew that if it was still tremendously challenging when you were very wealthy, it would be extraordinarily challenging for everybody. In addition to our end-of-life care funding, the foundation also supports prenatal and early childhood health initiatives.
When Joyce relaunched the foundation as chair of the board, she wanted to give back to the communities that the Stupskis call home, and she knew from the start that it was going to be a spend-down, because she wanted to see impact during her lifetime. Now, our overall mission is working towards the day when our health, food, and postsecondary systems collectively promote well-being and abundance for everyone. To realize that future, we’re returning all our resources to the communities that we collectively call home in the San Francisco Bay Area and Hawai’i by 2029.
Sulma Gandhi: Joyce and Larry had a home in Hawai’i, so they felt a sense of responsibility for the places where they lived. Even though the Stupski Foundation has been providing different types of support to Hawai’i for decades, they had done it differently—there were no staff with lived experiences on the ground—so one of the transitions in 2021 was to hire staff in Hawai’i with deep local knowledge and relationships.
This is my fifth year with the Stupski Foundation, and I was one of the first Hawai’i staff members along with my colleague Cheri Souza, who leads our postsecondary success work in Hawaiʻi. It was a unicorn opportunity to be closing down a foundation, realizing that all the needs among [the communities we serve] are urgent, and returning those resources as soon as possible to communities who are leading this work and who know what’s best for them.
I think about families on our neighborislands, who face enormous hurdles just to get care.By neighbor islands, I mean the islands surrounding the island of Oʻahu, where Honolulu and our central State government are located. On neighbor islands, a child who needs a specialty procedure that isn’t available locally must travel with their family to another island, requiring families to pay for hotel stays and take time off from work just to get the care the child needs. I also think about the daughter who’s taking her elderly mother on plane rides to another island just to get dialysis. These hurdles and challenges make it crystal clear that it doesn’t make sense for money to sit in endowments that are growing—likely in unjust ways that are not mission-aligned—when there are so many inequities and hardships occurring now. That’s what called me to this opportunity—this extraordinary unicorn opportunity—to return dollars back to communities as soon as possible.
What led the Stupski Foundation to adopt a spend-down strategy?
Dan Tuttle: Joyce relaunched the Stupski Foundation as a grantmaking foundation rather than an operating one based on her earlier experience. She was set on being able to see the impacts in her lifetime, which is why she decided to spend-down. She didn’t know exactly the date that it was going to close—which we’ve since worked out—but she wanted to see impact now, rather than decades from now.
Recently, my colleague Jen, who runs our Postsecondary Success program, put into words Joyce’s spirit, in a way I want to share:
“In reframing the 5 percent mandatory foundation payout in these urgent times, I also ask us to reframe who we’re most concerned about and what future we’re saving for. When nearly three in five teen girls feel persistently sad or hopeless, what are we saving for? When one in four students are chronically absent from school, what are we saving for? When an estimated 70 percent of low income fourth graders cannot read at a basic level, what are we saving for?” Obviously, there are equally distressing statistics throughout health care, so we need to wake up to the fact that foundations have the discretion to do more now, just like Joyce did.
What are some of the advantages and challenges related to having a spend-down strategy?
Dan Tuttle: As I understand it, philanthropy is supposed to be about the wealthy giving back to strengthen the society in which they accrued that wealth. For Larry and Joyce Stupski, the Bay Area and Hawai’i were the two places they called home—that’s their society that they are trying to strengthen. In a spend-down foundation, much, much, much more money goes out the door. In our case, that’s well over $100 million more. One hundred million dollars. With that, all the other challenges and advantages are secondary.
Make no mistake—there are a lot of other benefits. First, you can have more realistic conversations about program sustainability up front, because there’s no question that the grants will stop someday. Second, you’re much less likely to embark on the kind of radical strategy realignment that foundations sometimes do—some justifiably, other times seemingly just to force grantees to pull their hair out—because the clock is always ticking, so there’s less time for suddenly changing direction in the middle. Third, you have an additional excuse to drastically reduce the grant reporting requirements towards the end, because there’s zero possibility of a follow-on grant. All these things together mostly accrue to benefit the people for whom it’s important, which are the grantee partners.
Sulma Gandhi: In terms of the challenges, we’re an imperfect organization, and there’s so much of a learning journey that is taking place. One of the things that we have been trying to focus on, and that has become a non-negotiable, is how we exit. We are transparent and upfront about sustainability, and about being able to do things in a different way. But how do we also exit with care? We have a lot of conversations within our organization and with our partners about what they need from us, and how we can better [execute] this transition and co-create it together. Our work is not just about writing checks, returning resources, and sending dollars out the door—there’s so much that’s intertwined in the relationships and our integrity in those relationships.
What are the foundation’s priorities when it comes to the spend-down?
Sulma Gandhi: Our main priorities are around influencing the sector, and that happens by returning community dollars to the community as soon as possible. We’re also making sure that we align our endowment investments with our mission through program-related investments (PRIs), which Dan will touch on. We’re also prioritizing community—not only community engagement, but also decisionmaking—and moving decisionmaking as close to community as possible, so that they are making decisions on what is best for their community. Lastly, we’re really focused on exiting with care and integrity to close our foundation.
Dan Tuttle: As Sulma mentioned, at the center of all of this is returning dollars and, where possible, decisionmaking back to community, and doing so in a way that really honors the relationship where we try to exit gracefully.
One of the ways in which we’ve done that, which tends to confuse people who haven’t been in a spend-down before, is to move the foundation’s whole asset base—multiple hundreds of millions of dollars in assets—into cash equivalents. People often ask what happens if the market goes down, but we planned for this in advance because treasuries don’t lose value. As we’ve moved some of those assets in the background to things with more stable value, it has given us more ability to project exactly how much money we’ll have each year, and it also opened up an opportunity for PRIs. We figured that we are not using that money yet, and it is not locked up in the stock market. At some point, we’re going to use it for grants or closeout operational costs, but we don’t need it yet—we need it three years from now. Could it be used for an aligned purpose over the course of the next three years?
It turns out that for more than $20 million worth of PRIs that we’ve provided, the answer is yes, because there are lots of organizations out there that can benefit by having a three-year, no-interest loan, with the ability to pay it back. It meets our needs for forecasting in the future, and it meets our mission of continuing to make sure that our resources are deployed in ways that benefit the communities we’re trying to serve. The only sacrifice is that you’re losing 3 percent interest on three years on a treasury bill—that’s minimal compared to what it is unlocking for the recipients who have agreed to pay these back in the future.
How are you approaching the spend-down specifically in terms of your grantees in the health portfolio?
Dan Tuttle: We decided to accelerate the spend-down in direct response to the federal funding cuts and threats to the well-being of our communities that we’ve seen coming out of Washington D.C., particularly in H.R.1, the budget reconciliation bill that was passed in early July. A lot of our grantee partners in health rely on blended funding, some of which is Federal or comes through Medicaid or Medicare. Those grantee partners don’t have the luxury of being able to stick their necks out because their payroll is on the line, and many of them are understandably scared to advocate for themselves. Foundations, on the other hand, have assets that buffer them from attacks, and we believe that these resources belong in communities rather than in endowments.
While we continue to honor a person’s holistic health and well-being throughout the life course, a significant portion of our grantmaking in health concentrates on children under five and roughly the last two years of life, for which Medicaid in particular, and Medicare to a lesser extent, are deeply important and affected by federal policy. So, with the support of our board, we sped up awarding the bulk of our remaining available grant funds.
Sulma Gandhi: We were really excited about this idea to accelerate the dollars even faster, and this all happened in a very short period of time. When we assessed the escalating threats to public health on a national basis, we were also looking at how that impacts families and households in Hawai’i. It became really evident that we cannot delay action. The University of Hawai’i Economic Research Organization (UHERO) did data analysis to see what some of the impacts could be, and they came out with results that Hawai’i could lose over $400 million in Medicaid funding due to the policy changes that are happening nationally. That’s going to strain clinics. In response, the Stupski Foundation has committed over $22M to community health centers across Hawaiʻi with a focus on rural and remote care.
I also already touched on what health care access is like for people living on a neighbor island, including long waitlists for specialists, costly inter-island care, and limited access to essential care. This is going to potentially leave a lot of people without access to care, and these challenges are compounded by the threats coming from the federal government, which could perpetuate systemic inequities.
When all of this was happening, we were receiving phone calls and reaching out to partners asking how things are going and what they are experiencing. A lot of these conversations were emotional, and partners were stating that everything they do is around equity—around communities of color or Native Hawaiian communities. It is how they had written their grants to the federal government and received support in the past. They started receiving cutbacks, either not continuing programs or not getting the second set of funds they had been promised. One organization I’m familiar with, whose programs support development for Native Hawaiians, received a letter informing them that their grant was being terminated because one of their primary objectives was to further educational equity.
With support from our board, we were able to accelerate our 2025 grantmaking from $34 million to over $57 million, representing 76 percent of our remaining allocated grant funds, awarded this year. Of that, we returned $6.4 million in flexible operating support to 24 community-based organizations across Kaua‘i, Moloka‘i, Maui, Lāna‘i, and Hawai‘i Island.
This wasn’t just a decision about continuing to move resources with urgency—it was doing it with a very dedicated purpose. Our goal was to empower local organizations so that they felt a sense of breath, and so they could stabilize, continue to innovate, and would not be paralyzed with the uncertainty of potential funding gaps.
What is the foundation’s communications strategy regarding the spend-down, particularly with grantees and other partners?
Sulma Gandhi: Even though the foundation is not new, it was a little new for Hawai’i because they didn’t have faces in Hawai’i in the past. So, when I joined the foundation, it was almost like I was saying hello and goodbye in the same breath. We wanted to say “hi, we’re new and we want to build a relationship,” but also, we’re leaving soon. So, our communication has been rooted in trust and transparency. We’ve been upfront about our timelines, and we want our partners to know that they can rely on us, that they can trust us, that we would be present, that we can be responsive, that we can be thought partners, and that we are able to make big, bold moves to achieve these because of the spend-down.
Our communication is also about being in continued, open conversations with our partners, often to solve a certain challenge or hear what they are experiencing. For example, we just experienced the Maui fires a couple of years ago, so we were in close contact with our partners to determine how to respond in that moment, alongside the national response and support for our island of Maui, which I know everyone feels very grateful for.
Another thing we’ve been doing as a foundation is our Break Fake Rules podcast, which features our CEO, Glen Galaich, talking with guests who are breaking philanthropy’s self-imposed rules. On the podcast, we’ve been open in conversations about our decision to accelerate the spend-down. Our staff also regularly publish reflections about the work we are doing. And we want the field to understand not just what we decided, but how those decisions are being made and what those challenges are around it.
The way we are funding is very different in Hawai’i compared to other funders, because they’re not necessarily in the same conditions that the spend-down has offered us. When I ask grantees what more Stupski can do, they say, “can you get on a megaphone and share about why and how you’re funding in this way?” which is also part of listening to our partners.
How is Stupski approaching sustainability to ensure that programs continue to benefit communities after the foundation sunsets, particularly given the urgency of your recent grantmaking?
Dan Tuttle: One of the benefits of being a spend-down is that you’re forced to talk about financial sustainability from the beginning. This reduces the incentive to come up with really restricted project grants that might end up in the graveyard of discontinued pilots after the foundation is gone. For us, knowing this from the beginning meant that speeding up our grantmaking wasn’t a new challenge.
Organizations and programs all have slightly different answers to the question of financial sustainability, and they look very different depending on geography, recipient, context, and what their goals are. What we try to do across all of those is listen first and then try to make a decision together. We’re not always successful, because obviously the foundation continues to have the power to say yes or no—regardless of how much we try to equalize that—but we try very hard to jointly decide how we should structure the funds to be of most service.
For example, for some clinical programs, it makes sense to build a multi-year, gradual cost-share with the receiving organization, so that by year four it is fully funded without philanthropy. For other organizations, the best thing we can do is offer them a buffer—just some discretionary budget cushion—through general operating support grants. And then ultimately, they have discretion over all of that, with no reporting requirements and no term, so they own the questions of how to continue this in the future, and what to allocate this funding for.
For some other organizations, it’s less about funding a program that continues in the future, and more about either building internal leaders or building new organizational capacity that doesn’t require follow-on funding. This is particularly true for serious illness care, where many health care organizations focused on older adults might not have considered how to better prepare patients about advanced care planning, including incorporating aspects of individual education on specialty palliative care or upstream alternatives to hospice. We want to build the capacity of these organizations so they can incorporate a broader set of services into existing programming without needing additional money in the future.
Sulma Gandhi: As a foundation, we’ve also led and funded work on policy which is also part of sustainability for the community and people in the community.
Dan Tuttle: One of the benefits of having a multi-year lead up to a spend-down is that we had different phases of grantmaking in terms of what made the most sense as our potential contributions to the community. In the earliest years, when we still had the most amount of time before the end of the foundation, we chose actively to get more involved in policy related to Medicaid financing, so our partners could unlock more dollars, either at the federal or state level, for the programs that help people have better health care and live their lives longer and with more dignity. We got lucky in the beginning by having an extraordinary confluence of aligned partners in California. [We had] a program that was supposed to start as a pilot in two clinics to see if the parent could also get services during a pediatric well-child check. Instead, the following year it ultimately turned into a full-blown state policy with millions of dollars appropriated to spread this model of care across all of California. The central idea is that over the course of a spend-down, you can work at the beginning on policy and financing to set up better conditions for financial sustainability of the programs later.
There was also a recent success story in Hawai’i, which became the first state to create a community- and home-based palliative care benefit, either for Medicaid only or dually eligible members across the state. It’s in the process of being implemented now, and Stupski is significantly supporting multiple organizations on neighbor islands that are implementing and delivering this. Again, the key point is that across the timeline of a spend-down, you can work on policy and financing early on to create better conditions for sustainability later. Now, because we’re closer to exiting, we don’t do that kind of work anymore—we do the follow-on implementation.
What insights or lessons do you hope other funders take from Stupski’s approach to spending down and responding to the current moment?
Dan Tuttle: Foundations exist in America as a type of legally recognized organization according to the IRS. In law as a foundation, the tax code says you have to pay out at minimum 5 percent of your assets towards general do-gooder things. The IRS does not care about the ultimate well-being of the communities we’re trying to serve—they care about a 5 percent law. The fact that many foundations have taken that 5 percent as gospel and as law for themselves is deeply troubling. So, for goodness sake, give more now. If you’re not giving more now, in 2025, you’re putting the welfare of your foundation above the welfare of the people you ostensibly serve.
Sulma Gandhi: I hope other funders take away some of the key lessons from our journey: to prioritize trust over transactions; simplify processes so organizations can access resources without the unnecessary burden of report writing, proposal writing, and coming up with new strategies that fit into the box of whatever the funder strategy is; and to share power so communities have a real voice in the decisions that affect them. In Hawai’i, I see every day how much stronger programs are when local leaders are trusted to make the right calls for their communities. When we get out of the way, support local decisionmaking, and act in true partnership, we can really deliver on impact.
If there’s one lesson I hope other funders carry forward, it’s to trust communities and give them the space and resources to lead. Otherwise, even with our best intentions, we risk recreating the very inequities we all say we’re trying to dismantle.