SHAREHow has the economic recession affected the Haas, Jr. Fund’s grantmaking?
Economists say the Great Recession ended in June 2009 but its effects continue to be felt. Nationally, unemployment hovers stubbornly close to 10 percent and in the San Francisco Bay Area it is even higher.
Many nonprofit organizations are struggling to keep up with increased demand for their services at the same time that donations from individuals and foundations have been in decline – and government funding has dropped as well.
In the face of these challenges, the Evelyn and Walter Haas, Jr. Fund is making every effort to ensure that we can sustain current levels of support for current grantees. We are committed to maintaining our program budgets in our priority areas of immigrant rights, gay and lesbian rights, education, and nonprofit leadership support.
The Fund’s total grantmaking dropped from more than $32 million in 2009 to $25 million in 2010. Why is this?
In 2008, the trustees of the Haas, Jr. Fund completed a planning process that resulted in a sharpening of its strategic focus around the theme of “Rights and Opportunities.” In launching our Rights and Opportunities work, the Fund made substantial commitments to grantees working on issues of immigrant rights, gay and lesbian rights, and education. At the same time, we also made substantial commitments of transition funding to organizations that we supported in the past but whose work did not fit closely with our new strategic focus.
These commitments resulted in the Fund’s total grantmaking in 2009 rising to $32.5 million. It was the most we have ever given in a year. As the Fund’s President, Ira Hirschfield, described in a letter on the Web site at the time, making grants at this level was something we felt we had to do. We made commitments to our grantees, and we intended to live by those commitments.
We anticipated that the Fund’s total grantmaking in 2010 would have been at a similar level. But two things happened. First, we had planned to make payments on challenge grants the Haas, Jr. Fund had made a few years ago to encourage other donors to give. These grants required organizations to raise a certain level of matching funds in order to release our payments. Due to the state of the economy and its impact on other donors, these matching requirements are still being met, but they are being met later than we projected. Second, in a few cases, we negotiated with a few larger institutions to delay payments where organizations were able to do so without jeopardizing projects. We were very appreciative of this flexibility on the part of some of our grantees, allowing us to make good on our commitments while preserving the Fund’s assets for the long-term.
Given the impact of the Great Recession and the Fund’s decision to maintain program budgets, what is the condition of the Fund’s assets?
Like practically every other foundation, the Haas, Jr. Fund experienced a decline in the value of its assets during the economic crisis. The Fund’s assets declined from $627 million in 2007 to $477 million in 2010. The combination of a decline in our assets, plus an increase in grantmaking for new and transitioning grantees, meant that we were giving 7.5 percent of our assets in 2009. In 2010 we made grants equal to 5.4 percent of our assets. The accepted standard for foundations is to spend 5 percent of assets on grants and administrative costs, but the Haas, Jr. Fund long ago decided to make 5 percent in grants only the baseline for our grantmaking.
With spending on grants only at or above the 5% level, we anticipate the Fund’s long-term endowment will begin to erode. The Fund’s decision to keep making grants above the required level reflects a deep belief in the ability of our grantees to make a positive difference for the people and the communities they serve. Especially in times of economic distress, we want to make absolutely certain we are doing everything we can to support our grantees while still ensuring that we can continue to make a difference in the years ahead.
Does this mean the Fund is spending itself out of business?
No. The Evelyn and Walter Haas, Jr. Fund has been doing this work for nearly 60 years, and we are determined to ensure that we can continue to make a difference in our local community and beyond for years and decades to come. We may be a smaller foundation than we once were, but we remain committed to providing long-term support to the causes we care about.
Right now we are making every effort to ensure that we can keep delivering on our mission over time – and that we can do so as efficiently as possible. This is one reason why we recently moved offices. In December, the Haas, Jr. Fund moved from One Market, where we had been for 10 years, to less expensive offices at 114 Sansome. We also have cut staff and taken other steps to reduce costs.
No matter what happens to the economy in the months and years ahead (and we are hoping with everyone else for a sustained upturn), we’re doing everything we can to make sure we can continue to fulfill our mission well into the future – and keep helping our grantees deliver good results for the communities they serve.
