As 2010 begins, we look back at 2009 as a year of challenge for individuals, families and communities here in Alaska, and across both the country and the globe. True, the investment markets rebounded strongly from one of the worst performances in 70 years, but the psychological impact of the downturn itself, combined with both realized and unrealized losses likely mean that 2010 is the dawn of a “new normal.” What that might look like is anyone’s guess, but the days of double digit investment returns, financial leverage as a core strategy, and easy consumer credit will change. With consumer demand shifting, capital markets in the process of healing, and employers responding quickly with deep cost reductions, the economy will take some time to heal before individuals and families feel any tangible relief. As a result, demand for safety net services here in Alaska, which is already high, is expected to continue to rise.
Philanthropy’s “new normal,” both within the state and across the country, can best be described as refocusing on core interests. From an investment perspective, improved market conditions allow us to make some cautious adjustments to our 2010 grantmaking strategy. The intent of today’s post is to share this information as early as possible in hopes that it helps your organization plan for the year.
Where we were at this time in 2009
We responded quickly to the impact of a severely declining market, spoke with our nonprofit partners across the state and summarized that conversation here. The extreme negative impact on the Foundation’s assets caused us to implement reductions to every aspect of the organization. Very early in 2009 our staff resources were realigned and right-sized to reflect our financial position.
Programmatically, the Foundation made no significant new grant commitments in 2009 as it paid out grant awards from prior years. With the exception of the individual artist awards, grants supporting arts in schools, and Cultural Leadership and Management Assistance grants, all other programs experienced reductions. We slightly reduced the number of small grants and cut the average award size to $16,000 (a decrease of $5,000 from the previous year) by focusing exclusively on needs as opposed to wants. The large strategic grant program (Tier 2), which in 2008 awarded $13.8 million to Alaska projects, was essentially idled. At the very end of last year the Foundation awarded eight large strategic grants over $25,000.
Where we are today in 2010
From its high of roughly $600 million in early 2008, our asset valuation fell precipitously and then rebounded to approximately $425 million at the end of 2009. We are cautiously optimistic and offer the following guidance as we move forward:
Rasmuson Foundation’s highest priority remains to honor all commitments to current grantees.
Payments can only be made to partners who are current in their reporting to the Foundation.
The Foundation requires up to 90 days to process payment requests. Please communicate with your program officer and plan cash needs accordingly.
The Foundation anticipates maintaining a robust small capital, capacity-building, and program-expansion grant program in 2010.
We remain focused on funding critical organizational needs. Organizations are urged to prioritize the components of a given request and to expect the average award to again be roughly $16,000.
Large, Strategic Grants
In December, the Foundation announced eight new large, strategic awards – all of them either continued support for projects in which the Foundation had previous investments, or leveraged matching opportunities for shovel-ready projects.
The Foundation will be very conservative in considering new, large grant commitments as it continues to fund grants awarded in prior years. We will monitor investment performance closely and it is possible that the second half of the year might be much more positive, allowing for the consideration of new strategic projects.
If your organization has an opportunity that is extremely time-sensitive or that will leverage other funds, please talk with a program officer right away. In every circumstance, you are encouraged to call a program officer prior to submitting a Letter of Inquiry.
The Individual Artist Award program will be supported at a level commensurate with 2009. Postmark deadline for those applications is March 1.
Our other arts programs will, in general, experience an increased level of support as compared to 2009. We are in the early stages of reflecting on the first six years of our commitment to the arts in order to identify improvement opportunities.
The Sabbatical Program will return to funding up to eight awards for the 2011 cohort (in 2009 funding was available for up to six.) The postmark deadline for Sabbatical applications is October 1.
The Pre-Development Program offered through the Foraker Group that is designed to help nonprofits evaluate, plan and execute capital building projects continues its work across the state.
Program-Related Investments (PRI), often structured as loans, might be an option for some nonprofits for projects that advance the Foundation’s charitable goals. Applications are by invitation only. More information about PRIs can be found on our website. Please contact Program Officer Chris Perez (907-334-0522) with questions.
The Permanent Fund charitable contribution program, “Pick.Click.Give,” has proven its potential to augment organizations’ donor development programs. If you have not made special efforts to ask your donors to support your organization through “Pick.Click.Give,” I urge you to do so today. If you did not apply in time to participate this year but think your organization is eligible, I encourage you to contact The Foraker Group at 743-1200 (toll free: 1-877-834-5003) or log on to www.pickclickgive.org for more information.
For all new applications, eligibility criteria remain as stated in the guidelines which can be found here on the website.
While we can’t predict the future, we take seriously the responsibility to protect the capital assets of the Foundation in a manner that enhances our ability to work with you, our nonprofit partners, to meet community needs today and in the future. We believe that these prudent adjustments meet the spirit of Jenny and Elmer Rasmuson’s wish that the Rasmuson Foundation serve the state and its citizens in perpetuity. We also know that future events may cause us to reassess and reposition to meet this responsibility. Should that happen, additional information will be promptly shared here on the blog and website.
Please call if you have questions not addressed here. You can find additional information and grant guidelines reflecting these adjustments here on our website.