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President's Message
February, 2010
Dear Friends:
We entered 2009, holding our breath, having just budgeted a $250,000 reduction in revenues from 2008’s budget. For the first time ever, we accepted a deficit budget, deciding this definitely was a rainy day to be covered by the reserve fund we had built up over many years of saving. In January, February, and part of March, the market continued down below even our most conservative predictions, and we decided to cut our budget some more. We spent the first two months working out issues we never had to work out before: underwater funds with multi year commitments, exercise of variance power, comparisons of investment performance, advice, and service of consultants. We asked questions we never had to ask before: Should we hold more cash to cover our grant obligations and protect against further investment losses? What’s the best way to tell a grant committee it has no money to grant? What projects can the YAC do in lieu of making grants? To many donors we asked: Will you fund your scholarship commitments with new gifts?
We became more resourceful and creative; producing an unusual and superb annual report for a fraction of the previous year’s cost. We attended conferences using scholarships from other Foundations. We teleconferenced and webinar-ed instead of traveled, and held meetings at 4 p.m. so we didn’t have to buy lunch. We looked for grants, and formed partnerships to jointly fund grants and share costs. None of all that was so hard and we learned we should do it even in a good year.
2009 was a stand out year for our portfolio’s investment return (+28%, ending the year with total assets of $112M), but because it followed 2008’s 30% drop, (we began that year with total assets of $124M and fell to $88M by year end) our celebration was muted. Throughout 2009, freshly educated by 2008, we examined our investment programs, policies, approaches and advisors. In October, we voted to hire Consulting Group of Farmington Hills, MI as our new investment advisor.
As grantmakers we learned $88 million is still a lot of money, even if it is the same $88 million we saw five years ago, and three years before that! And like the loaves and fishes in the miracle, the grant money we had in 2009 was enough for 2009.
For the competitive grants, we searched our funds for every available dollar, and had lots of conversations with grantees. Non-profits scaled back, put ideas on hold, and stretched resources. Donor advisors and living donors really shined in 2009, providing gifts that propelled our entire community upward against the depressive force of 2009’s economy. Among them were the Witham Fund’s grant to create McLaughlin Grows, the Eklund Fund’s grant to make the FCPA lean and green, the Turner Fund’s gift of Charles Hackley’s life size bronze seated at the Culinary Institute of Michigan (CIM), and the Olthoff Fund’s gift of a beautiful Street Stage on the Third Street Promenade. And Match Day, when the entire community responded to the challenge brought by 2009 and placed a corporate “Bless you” on Muskegon’s non-profits.
Overall, even accounting separately for Match Day numbers, giving to our funds in the first three quarters of 2009 was amazingly generous in our scary economy. Given that the fourth quarter sometimes accounts for 40% of our total yearly gifts, we were expecting a decent year. Then, in the fourth quarter we got one of those calls that remind us of the fantastic delights of this business, and told us we would have a very decent year for gift totals, an exciting 2010, and many benefits for the community in the years to come.
All in all 2009 was a thrill ride; one that we entered reluctantly, but one that we exit joyfully, ready for the next ride, and honestly declaring, “That was amazing!”
