Winston-Salem Foundation regrouping

Scott Wierman
Scott Wierman

Todd Cohen

WINSTON-SALEM, N.C. — With the market value of its endowment falling to just over $200 million, down nearly $100 million from the end of 2007, the Winston-Salem Foundation has trimmed expenses and the share of assets it pays out each year in grants.

Grants this year likely will be down 10 percent from last year, says Scott Wierman, the foundation’s president.

“We are committed to remaining open to receiving proposals from our local community,” Wierman says. “We’re trying to be as much business as usual as we can, although with fewer dollars to work with.”

The foundation also aims to be pro-active, seeing the economic crisis as an opportunity to examine its priorities, while working with other funders to track critical needs in the community, Wierman says.

“These opportunities can carry forward when things return,” he says. “You get to be a little smarter with your resources, a little more efficient.”

In 2008, the foundation made $23.8 million in grants, down from $30.1 million in 2007.

“This year, my guess is it will be at best flat, in all likelihood down at least 10 percent,” Wierman says.

Last fall, with the economy and capital markets taking a beating, the foundation’s board decided to adjust its policy on spending endowment dollars, lowering the share of assets it distributes each year to 4.5 percent of the average market value of its funds over the previous three years, down from five percent.

For the average fund housed at the foundation, that policy change resulted in a 10 percent cut in grant dollars, Wireman says.

And because donor-advised funds typically give away more than the minimum, overall giving at the foundation actually has averaged 9 percent to 10 percent of assets for many years.

Unlike many other funders, the foundation mainly makes grants on a year-to-year basis and does not have a lot of its assets tied up in multi-year commitments, he says, so the impact of the change in spending policy should not have as big an impact as it might have.

Still, he says, the foundation has seen a big increase in the size and number of grant requests, and in the critical nature of the needs nonprofits are trying to address.

One agency that lost income from contracts and state funds, for example, asked the foundation for operating funds to prevent a big cut in services, and possibly even their termination.

“We’re now getting requests that, without your support, we might have to close down or cut back on our services pretty dramatically,” Wierman says of agencies seeking grants.

The foundation also has seen requests from agencies to fund an increase in demand for critical services, he says.

Consumer Credit Counseling Services, for example, recently asked for a grant, which the foundation awarded, to hire more counselors to meet a surge in demand for assistance in preventing foreclosures.

The foundation also has met several times with United Way of Forsyth County and the Kate B. Reynolds Charitable Trust to talk about the possibility of pooling resources or supplementing their respective efforts to address critical community needs.

The three funders also have been holding monthly talks with nonprofits that address emergency needs.

“We are working,” Wierman says, “to prepare to be able to respond when necessary.”

The foundation also has reduced its spending.

Last fall, through cuts that included a salary freeze and elimination of most travel and training, for example, the foundation trimmed spending for the year by five percent.

And this year, the foundation has reduced its budget by 10 percent, including elimination of a matching-gifts program for employee contributions and cancellation of events the foundation traditionally has hosted for donors and grantseekers.

The foundation has not cut any staff or contributions to health or retirement benefits, Wierman says.

He says the economic crisis also has provided the foundation and other nonprofits with an opportunity to strengthen their efforts to secure planned gifts, often through wills, estate plans and bequests.

Even though gifts of stock fell 84 percent last year because of the plunge in the capital markets, while cash gifts actually grew 4.7 percent because donors still could write checks, Wierman says, the recession has prompted people to reassess their estate planning.

“There’s still an opportunity for philanthropy,” he says.

Seven donors who recently died left a total of over $7 million the foundation will receive as the donors’ estates are settled.

“For those institutions that have healthy planned-giving programs,” Wierman says, “those kinds of opportunities can continue even in down markets.”

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