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Mertz Gilmore, Argosy Foundations, Harvard Respond to Economic Crisis

November 22, 2008

Mgf_logo_whiteI've written previously (here) about the good work being done by the New York City-based Mertz Gilmore Foundation in the area of climate change. At its fall meeting, the foundation's board approved a 2009 budget that maintains current funding levels for the NYC Dance and NYC Communities programs, as well as its Climate Change Solutions program. Said Jay Beckner, the foundation's president:

Regardless of current or future investment returns, we believe it is very important to recognize the difficulty that nonprofits in New York will have in the face of declining individual, corporate and governmental support. Mertz Gilmore will do everything it can in 2009 to sustain the work it supports while looking for creative responses to this sector-wide crisis.

With respect to climate change, foundation vice president Lukas Haynes added: "The country is on the verge of major new initiatives to address the climate crisis while transforming the nation's economic and energy future. Therefore, the Climate Change Solutions program will maintain its current level of investment to reinforce positive change and seize timely new opportunities."

The Argosy Foundation, a private family foundation founded in 1997 by John Abele, co-founder of Boston Scientific, has released this statement:

We, like many other organizations, have been adversely affected by recent developments in global markets. Unfortunately, this means that we have to significantly reduce our grantmaking until we are confident that our long term ability to fulfill our mission is secure. We understand how challenging these times are. We remain committed to our vision of creative, productive philanthropy and remain committed to helping you fulfill your own missions.

The foundation does not accept unsolicited proposals.

Harvard_shield_2And this is an excerpt of a statement issued a couple of weeks ago by Drew Faust, president of Harvard University:

...[W]e must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered. We will need to plan and act in ways that reflect that reality, to assure that we continue to advance our priorities for teaching, research, and service.

Our principal sources of revenue are all likely to be affected by these new economic forces. Consider, first, the endowment. As a result of strong returns and the generosity of our alumni and friends, endowment income has come to fund more than a third of the University’s annual operating budget. Our investments have often outperformed familiar market indexes, thanks to skillful management and broad diversification across asset classes. But given the breadth and the depth of the present downturn, even well-diversified portfolios are experiencing major losses. Moody’s, a leading financial research and ratings service, recently projected a 30 percent decline in the value of college and university endowments in the current fiscal year. While we can hope that markets will improve, we need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constraint.

The economic downturn also puts pressure on other revenues that fuel our annual budgets. Donors and foundations will be harder pressed to support our activities. Federal grants and contracts for sponsored research will be subject to the intensified stress on the federal budget. Tuition remains an important source of revenue, but in times like these we want to keep increases moderate, mindful that many students and families are facing economic strain.

Over the past several weeks I have been meeting individually and collectively with the deans of the faculties, as well as the Corporation, to share ideas on how we can best respond to this changed economic environment. We need to sustain our high academic ambitions at the same time that we bring greater financial discipline to all our activities. We have to think not just about what more we might wish to do, but what we might do at a different pace or do without. Tradeoffs and hard choices that can be avoided in times of plenty cannot be averted now. And, given the ongoing volatility and uncertainty, we need to plan and budget with a range of contingencies in view, including scenarios for reducing our spending both this year and next....

If Harvard, with a $35 billion endowment, is feeling pain, I shudder to think what may be in store for the rest of us....

-- Mitch Nauffts

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