“And now after considerable experience with the many public institutions which I have managed, it has become my firm conviction that it is not good to run public institutions on permanent funds. A permanent fund carries in itself the seed of the moral fall of the institution. A public institution means an institution conducted with the approval, and from the funds, of the public. When such an institution ceases to have public support, it forfeits its right to exist. Institutions maintained on permanent funds are often found to ignore public opinion, and are frequently responsible for acts contrary to it. In our country we experience this at every step. Some of the so-called religious trusts have ceased to render any accounts.”
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An organization kept alive by a permanent endowment stops needing anyone's ongoing approval, and that comfort slowly rots it. When a body must earn its funding from the public it serves, it stays answerable; guaranteed money lets it drift, ignore criticism, and outlive its usefulness unchecked.
When to use it
- A charity sitting on a huge endowment that shrugs off donors' complaints because it no longer needs their gifts.
- A neighborhood association living off a one-time grant that stops holding the meetings its members actually want.
- A club coasting on old dues reserves that keeps running programs nobody attends because the money never runs out.