Spring 2009
We live in extraordinary times amid economic conditions unprecedented in most of our lifetimes. The downturn in capital and credit markets defined 2008, and our economy continues to face significant challenges so far this year. Against this climate of uncertainty and challenge—for individuals, corporations and nonprofit institutions alike—I wanted to take the opportunity to share how The Foundation is responding.
Let me say at the outset that our Foundation is not immune from these same challenges and, in certain respects, is even representative of them. However, through the conservative, stable approach to operations that is the hallmark of this organization—not to mention committed donors, a tireless lay leadership, and dedicated staff—we are navigating this sea change better than most. Notably, we are resolute in honoring all outstanding grant commitments. The Foundation’s mission—to its donors and various communities—is steadfast and, with the harsh economic backdrop, assumes greater urgency than ever.
We remain focused on addressing these pressing communal needs and channeling funding where it will have the most significant impact. Just a few of these ways include:
- One-time Community Relief Grants, totaling $1 million, established this spring in an effort to respond in a timely way to the economic downturn. Awarded to The Jewish Federation and its affiliated agencies, the funds are aimed at helping working- and middle-class Jewish residents of Los Angeles who have been directly affected by the downturn through layoffs, reduction of hours, changes in family finances and retirement benefits, or other situations related to the downturn. The Jewish Federation and the Jewish Family Relief Network consisting of Jewish Family Service, Jewish Vocational Service, Jewish Free Loan Association, Bureau of Jewish Education, and Jewish Big Brothers/Big Sisters will administer these funds to their various constituencies.
- Los Angeles Collaborative Grants, formerly our General Community Grants, recently awarded $200,000 to nonprofit, government and private sector coalitions that work collectively to focus on important issues in the general Los Angeles community. We hope that by banding together, recipients of these new grants will make a greater impact than is possible by each recipient working alone.
- A continued but scaled down commitment to our Cutting Edge Grants Initiative that fosters innovative programs with the power to transform Jewish Los Angeles. It is imperative that, especially in troubled times, we continue to encourage creative problem-solving by social entrepreneurs. With its financial resources and knowledge-base, The Foundation is uniquely positioned to help incubate these endeavors through its Cutting Edge Grants and, in the initial three years since inception, has dispensed $4.2 million to a range of breakthrough initiatives, including $1.6 million to seven causes in 2008.
Prudent stewardship of assets, with an emphasis on diversification, helped mitigate the impact of steep capital market declines and our regrettable exposure in the Bernard Madoff fraud. We are, as well, grateful for the continued confidence and charitable largesse of our donors, who in 2008 added $82 million to Foundation funds, including a $15.4 million addition to an existing Donor Advised Fund near year end. At Dec. 31, 2008, our assets stood at $690 million; last year, we and our donors distributed approximately $65 million in grants to hundreds of worthy Jewish and general community causes.
Our Donor Advised Funds, invested primarily in U.S. Treasury and other government instruments to enable liquidity and flexibility, returned 3.8 percent last year. Results of The Foundation’s endowed and managed charitable assets, known as the Common Investment Pool, more closely reflected the performance of broader markets, and declined by approximately 29.6 percent in 2008. To put this decline in perspective, our Common Investment Pool significantly outperformed both the S&P 500 and Dow Jones Industrial Average, which fell 37.6 percent and 32.7 percent, respectively, over the same period.
Our organization’s strength and breadth of resources enable us to fulfill our primary mandates: providing support for nonprofit programs and institutions; encouraging the philanthropy of The Foundation’s donors; and assisting them with estate-planning strategies that bring meaning and impact to their charitable giving.
I recently came across an inspirational thought from Rabbi Niles Goldstein, spiritual leader of the New Shul in New York City, which befits the times:
Muscle tissue gets stronger after being broken down. I believe the same is true of our souls. Feeling broken from a crisis opens our hearts and helps us appreciate things we previously took for granted.
When the prevailing cross-currents pass—and assuredly they will—I have every confidence that our Foundation and our community, too, will emerge stronger and our hearts will remain open.
