RALEIGH, N.C. – In response to dwindling assets and the continuing macro-economic malaise, the John Rex Endowment will award less in grants this year, but will introduce a new capacity-building funding program.
The endowment’s assets have taken a beating during the past several months, falling to about $55 million from a high of about $85 million after investment losses and the payout of grants and related expenses, says Kevin Cain, president and CEO of the foundation.
The Raleigh-based endowment determines its grantmaking budget based on a 12-month rolling average of its assets, so while dollars awarded this year will drop, and limited “fresh money” will be awarded, Cain says, the impact on current grantees will be minimal.
“We’re fully prepared to meet all the commitments we’ve got,” he says. “As long as the grants are performing, that won’t be an issue.”
The board of the endowment considers the mandated payout of 5 percent of assets a minimum, says Cain, and plans to award at least the same percentage of its assets this year as in the previous three.
Last year, that totaled about $4 million, he says.
“This is not a time for us to hold back,” says Cain of the board’s commitment to its mission. “Our real purpose isn’t to protect money; it’s to advance the health and well-being of young people in Wake County.”
Already this year, the board has approved five grants totaling more than $1 million, each with the goal of increasing access to health care.
But Cain says the final two grant cycles of the year likely won’t see numbers that large.
New this year, however, will be $140,000 in capacity-building grants, with a request for proposals going out in May.
“Those are the kinds of grants where you see great impact from the money,” says Cain. “With limited funding available this year, we’ll do grants specific to building he capacity of nonprofits.”
As that new program is launched, the foundation will bring to an end grants whose only purpose is to underwrite the costs of care.
“These are grants where our money allows an agency to do something they couldn’t do without our support,” he says.
While such projects have value, he says, those relationships in some cases have lasted five or six years.
The discontinuation will affect three grantees this year, all of whom have had one to two year’s notice that funding will cease, and all projects will run to their “natural end.”
“It’s better use of our money,” says Cain of the shift. “It’s always difficult, but it needs to be done. If we can provide assistance about where to go next, we’re happy to do that.”
Internally, the foundation is cutting costs where possible, canceling its annual Hands of Health celebration and the printing of its annual report, and cutting back on travel for the organization’s three employees.
The foundation will work to offset the lower level of grantmaking in 2009 by working more directly with agencies to help them accomplish as much as possible and become stronger.
That kind of time and commitment, coupled with cooperation between and among funders and nonprofits, is beneficial, says Cain.
“If you work through hard times together, you come out the other side with a real relationship,” he says. “Long-term, that’s important. If we work together and build trust and understanding, that’s a good outcome. But it’s hard work.”