Our Strategy in a Difficult Economy
The Community Foundation of Lorain County turns donors charitable dreams into permanent legacies, invests in our community through strategic grantmaking and leads our community to a better future – FOREVER. This is our mission and promise in both good and challenging times. We begin 2009 hopeful of economic recovery but fully aware of the current realities facing our foundation and community. As a close friend of this foundation, we want to make sure that you understand our decisions and actions in this difficult economic time.
This economic recession has reduced the size of our assets and the capacity of our nonprofit sector while tragically increasing human need within our community. Hence, our Board of Directors and staff are diligently working to balance our responsibilities to protect our community’s endowment while maximizing the impact of our grantmaking dollars. It is easy to be transparent when the news is good, but we believe that it is absolutely critical to be transparent during challenging times. In that spirit, I’d like to highlight five actions your community foundation is employing today.
1) Our Board has approved a very conservative operating budget for 2009. We implemented additional efficiencies so that we may continue providing quality service to our donors, grantees and community.
2) Our Investment Committee has reviewed and affirmed our investment strategy in light of the current market trends. Research tells us that maintaining a well diversified portfolio will have the best long-term results, regardless of an impulse to shift our strategy. Under the watchful eye of Colonial Consulting, we have had no exposure to some of the more publicized investment situations such as AIG, Lehman Brothers, Madoff, etc. We are well positioned to benefit when the market begins to recover.
3) Our Board voted to maintain our spending rate of 4.875% for 2009. As you know, this rate is applied to the average 3 year market value of funds at the foundation, spreading out the impact of the recent market losses. The Board also approved a plan to hold a small portion of 2009 grant dollars in reserve so we can provide consistent dollars for grantmaking over the next three years.
4) Our Grants Committee is diligently working to gain the most impact with our grantmaking in 2009. We anticipate that competition for grant dollars will increase and grant decisions will become more difficult as the economy continues to impact our nonprofit agencies. We are asking our grantees to be specific about their needs and realistic in their planning.
5) Finally, the Community Foundation is actively encouraging continued smart giving. We understand the impact of this recession and want to provide the best possible giving vehicle for the many generous donors who continue to give back to our community. Crafting a planned gift may be a particularly attractive option when real-time giving is challenged. Gifts and bequests in 2008 helped offset losses from investments by almost $5M.
The Community Foundation is designed to weather good economies and bad. We assure you that we are monitoring present conditions and projecting the implications of our decisions into the future. We encourage your questions and concerns as well as your continued contributions and planned gifts. As a colleague of mine said recently, “We all need hope - not the delusional kind, but the kind that shines a light on the path so you can see a way to get to your goal!” I trust you will continue seeing the Community Foundation of Lorain County as a light on your path to giving back to our great community.
Brian R. Frederick John Keyse-Walker