Headed by Epic founder and CEO Shana Dall’Osto’s youngest daughter, the Roots & Wings family foundation will soon donate nearly $100 million to hundreds of nonprofits each year.
With Katie JenningsForbes Staff
When Warren Buffett called, Judy Faulkner agreed to meet him in Omaha for dinner.
Faulkner, the billionaire founder and CEO of Verona, Wisconsin-based Epic Systems, had made her fortune in the Midwest. In a dining room at the Happy Hollow Club, Buffett made a motion to sign The Giving Pledge, a commitment by the world’s richest people to give the majority of their money to charity. “I thought, since I’m trying to give my money away, it would be nice to work with people who have done this,” Faulkner, 81, said. Forbes.
Faulkner, who Forbes worth an estimated $7.7 billion, she signed the pledge in 2015 but didn’t make her philanthropic plans official until 2019, when she founded Seattle-based Roots & Wings. This family foundation is run by Faulkner’s youngest daughter, Sana Dal’Osto, 45, who was born in 1979 – the same year Epic was founded. Despite Faulkner’s wishes that all three of her children would become computer programmers like her (only one), Dall’Osto joined the Peace Corps, then AmeriCorps and later a children’s education nonprofit before earning a master’s degree in nonprofit management .
Over the past five years, Roots & Wings has quietly given away $200 million to 320 different organizations focused on various aspects of early childhood development (see list of grantees here). Dall’Osto said Forbes the foundation is stepping up its grants as Faulkner wants “to make more of her gifts while she lives.” Within the next few years, he estimates Root & Wings will begin donating about $100 million annually to organizations across the country focused on the health, education and well-being of children and their families. “One of our goals is for kids to get a strong start in life so they can reach their full potential,” Dall’Osto said. “We see this strong start as roots and their full potential as wings.”
Shana Dall’Osto (center) with staff at Roots & Wings in Seattle, WA.
Arlene Chambers
Throughout her career, Faulkner has played down convention in the way she conducts business. While most of its competitors have used outside money and acquisitions to develop software, Epic, which has revenue of $4.9 billion in 2023, has always been private and has always developed its own products. Faulkner and her daughter also take a unique approach to philanthropy. Rather than forcing nonprofits through a labor-intensive vetting process and then dictating how grant money can be used, Roots & Wings is based on the idea that the organizations doing the work know best. “If you’re going to give them money, trust them and let them make the decision about what’s right,” Faulkner said.
The term for this practice is trust-based philanthropy—a growing movement to shift the traditional top-down power dynamic that has defined centuries of philanthropy, most notably the practice of MacKenzie Scott, who has so far given 17 .3 billion dollars without restrictions. Rather than stymie their efforts to match the specifications of a funder’s vision, nonprofits receive unlimited, multi-year grants with minimal reporting requirements.
Elisha Smith Arillaga, vice president of research at The Center For Effective Philanthropy, said Forbes it is about the distribution of responsibilities. “Is the onus on the beneficiary to fill out the application, or is it on the sponsor to do their due diligence beforehand and then decide they trust the organization enough to want to invest in it?”
Roots & Wings’ decision not to place restrictions on how its funding can be used is rooted in Dall’Osto’s first-hand experience working at a literacy nonprofit that struggled to pay staff of because the grant money was limited to expanding the reading programs but prohibited from paying the people who would deliver them. “There’s a saying that a gift comes with a bow and a grant comes with strings,” he said. “If funds can only go to programs and can’t go to overhead, then that creates this cycle of starvation for the nonprofit, where it can’t be healthy and grow.”
Ruth Schmidt, executive director of the Wisconsin Early Childhood Association, remembers getting a call from Dall’Osto in April 2021. There was no mention of money. Instead, they discussed the impact of the Covid-19 pandemic on child care programs and “the whole boring mess of the early care and education system.”
A few months later, Roots & Wings offered Schmidt $50,000 for general operating support. In the months that followed the grant increased — to $200,000. then $400,000; and finally $2 million. Schmidt said these flexible funds gave her agency “considerable breathing room.” Instead of endlessly chasing money to fund core operations, the Wisconsin Early Childhood Association had the resources to plan for growth and decided to invest more in the staffing and policy research needed to support child care as a “public good.” that deserves government investment. similar to public school.
Aa long-running software engineer, Faulkner is as methodical in her approach to philanthropy as she is to business. Her pilot project for philanthropy began in 2012 with the Magic Pebble Foundation, which has given about $1.5 million annually to about 100 groups in its eight years of operation. “It was a way for us as a family to learn about the charity and learn about the needs of the community,” Dall’Osto said.
In 2019, Faulkner told Dall’Osto she was ready to do more. Although she had agreed to donate 99% of her assets to charity through the Giving Pledge, most of her wealth was tied up in Epic stock. Faulkner currently owns almost half of the company and worries that a large sale could destabilize it. So he set up a trust to govern the process of reselling shares in increments of about $100 million each year. Epic buys back the shares, which are then offered to its employees and the proceeds go to Roots & Wings.
Judy Faulkner holds her daughter Shana Dall’Osto in 1979.
Courtesy of Shana Dall’Osto.
Roots & Wings launched in early 2020 with the first disbursement of $100 million in endowment. When the pandemic hit a few weeks later, Dall’Osto and the agency’s only other employee were able to get “50 grants through the door, no application needed,” he said. Since then, they have continued this quick and largely painless practice. Doing extensive due diligence on a nonprofit organization before a first phone call, they are often able to offer a grant until everyone hangs up.
In 2020, Roots & Wings awarded $15 million to 115 organizations. In 2024, Dall’Osto estimates the foundation will grant $67 million to 305 organizations, with the idea that it will grow steadily to grant $100 million annually within the next five years and possibly as soon as 2027.
While some Signatories to the Giving Pledge, such as Duty Free Shoppers billionaire Chuck Feeney, have pledged to give away all their wealth during their lifetime, Roots & Wings will continue after Faulkner’s death. Dall’Osto said the foundation averages a distribution of between 10% and 15% of total assets each year.
This is much higher than what most foundations distribute, often only the minimum 5% required by the IRS to maintain nonprofit tax status. Foundations also often adhere to this limit so they can exist in perpetuity, as 5% is roughly the annual return on investment they could have on an endowment.
Because Roots & Wings keeps increasing the number of dollars out the door, it will eventually run out of money. It will take nearly 80 years for Faulkner to give away $7.7 billion in annual increments of $100 million, and much more than that for Roots & Wings to spend, assuming annual investment returns and a 15% allocation. Dall’Osto wouldn’t give a specific timeline, other than “we expect to continue giving for many years to come.”
With seven employees and two consultants, he said Roots & Wings will remain a “lean” and “learning” organization that prioritizes listening to the needs of the community. While trust-based philanthropy has been criticized in some circles for lacking strategy and accountability, Leslie Huber, director of strategic engagement at Way Forward Resources, a Wisconsin-based food and housing nonprofit, said that hasn’t been the case since her experience. With Roots & Wings, “we don’t feel like the accountability piece is gone,” he said. Forbes. “It’s the way they do it. Through that relationship building instead of paper pushing.”
Dall’Osto hopes other funders will follow suit and let nonprofits take charge instead of getting bogged down in bloated bureaucracy. “It’s better to put the money into the community and it’s better to fund a bunch of organizations and take the risk that maybe one isn’t going to be as successful as it could be,” he said. “But the majority of them will do good things and continue to help and save lives.”
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