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 California and 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. The struggles are unlikely to end soon. History shows that the nonprofit sector usually recovers from recessions more slowly than other sectors because it takes time for individual, government and corporate donors to return to their earlier levels of support for charitable and community causes.
In the face of these challenges, the Evelyn and Walter Haas, Jr. Fund is making every effort to maintain—and in some cases increase—our grantmaking budgets in immigrant rights, gay and lesbian rights, education, and nonprofit leadership.
The Fund’s total grantmaking dropped from more than $32 million in 2009 to $25 million in 2010. Why is this?
At $32.5 million, the Fund’s total grantmaking in 2009 reached a record high. The decline in grantmaking between 2009 and 2010 had three principal causes:
- Made substantial commitments for priority grantees in 2009. In 2008, the trustees of the Haas, Jr. Fund completed a planning process that resulted in a sharpening of the Fund’s strategic focus. In carrying out our Rights and Opportunities work, the Fund stepped up support to grantees working on issues of immigrant rights, education, nonprofit leadership and critical assistance. Additionally, the Fund maintained a strong commitment to gay and lesbian rights.
- Continued funding for transitioning grantees in 2009. At the same time that it was stepping up its support for priority grantees under our new plan, the Fund also made substantial multi-year commitments of transition funding to organizations that we supported in the past but whose work did not fit closely with our new strategic focus.
- Deferred payments to larger grantees. In select cases, the Fund negotiated with a few larger institutions to delay payments beyond 2010 in instances where such a delay would not adversely affect the institution or its programs. 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 some of 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 $463 million in December 2009. Fortunately, markets are rebounding, and the Fund’s portfolio rose to $478 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 legal 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-percent level, the Fund’s long-term endowment might begin to erode. In fact, over the last three years, the Fund’s grantmaking has averaged 6 percent of assets. The Fund’s decision to keep making grants above the required level reflects the deep belief of our trustees in the urgency of the issues that the Fund’s grantees are working to address. Many of our grantees are working to reduce and eliminate inequities that are keeping millions of people from enjoying basic rights and opportunities; these inequities need to be addressed right now.
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. Over the last few years, we also have reduced the size of staff and taken other steps to trim 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.