Does spend down means simply spend or runs
I couldn't found this phrasal verb from the dictionary.
The neocon defense intellectuals, as well as being in or around the actual Pentagon, are at the center of a metaphorical "pentagon" of the Israel lobby and the religious right, plus conservative think tanks, foundations and media empires. Think tanks such as the American Enterprise Institute (AEI) provide homes for neocon "in-and-outers" when they are out of government (Perle is a fellow at AEI). The money comes not so much from corporations as from decades-old conservative foundations, such as the Bradley and Olin foundations, which spend down the estates of long-dead tycoons. Neoconservative foreign policy does not reflect business interests in any direct way. The neocons are ideologues, not opportunists.
Extra Ref http://www.antiwar.com/orig/lind1.html
Best Answer
Spend down means to spend until you have significantly less or nothing left. In this case, it means that they are spending the money that was willed to them by wealthy tycoons, rather than investing that money and spending the interest.
This phrase is also often used when people need to "spend down" a certain amount of their assets to qualify for benefits. For example, a person may need to spend down their assets to qualify for Medicaid.