Colorado’s largest charitable foundations suffered enormous drops in their assets in 2008 — hundreds of millions of dollars each, after investment losses of 21 percent to 43 percent — and are now recasting their missions with smaller pots of working money.
Some already have cut grant projections for 2009, meaning less money for charitable causes ranging from amateur sports to counseling teenagers.
Other major foundations, though, are boosting the annual percentage paid out from their shrunken endowments in order to maintain or even increase giving after the 2008 crash.
A Denver Post survey of 10 of the state’s largest foundations found losses as high as 43 percent at the aggressively invested Gates Family Foundation, wiping out $222 million of its endowment. The Daniels Fund watched $317 million melt from its previous $1.3 billion holdings, though that 27 percent drop and similar results at other Colorado charities were not as devastating as the 50 percent plunge in Wall Street indexes.
“It’s a sobering deal,” said Gates Family Foundation president Tom Kaesemeyer. “We tend to go up very quickly in good times, and we’ve gone down very quickly in bad times.”
The Colorado Trust has decided to cope with its 34 percent loss by spending more. The deep recession behind the market losses means more Coloradans need help than ever, the trust believes, and so the fund will bump up grants from $22.3 million in 2008 to $26.8 million this year.
The Denver Foundation also has decided to prop up spending, even if that means eating away at some of the endowment money. The community foundation wants people to hear the message “Dig a little deeper if you can,” said president David Miller. “Those of us who are employed can try to help those who aren’t.”
The Internal Revenue Service requires foundations to give out at least 5 percent of their monthly average assets in order to maintain tax-free status. Certain Colorado charities will now push that payout closer to 7 percent so that the organizations they give to won’t see devastating losses in program money.
Many of the largest funds also are shifting their spending from capital grants or nonessential charities, and creating emergency funds to help social-service agencies overwhelmed by greater demand.
The El Pomar Foundation in Colorado Springs saw its endowment drop $131 million during 2008, to $436 million. As a result, grants will decrease from $25.4 million last year to $23.5 million this year, said El Pomar chairman Bill Hybl.
El Pomar is suspending new awards for requests such as building projects at schools, museums or libraries, Hybl said. More grants will go to agencies serving basic needs, such as food, shelter and health care, and El Pomar created a special $1 million payout at Thanksgiving for emergency-service providers. The foundation is likely to repeat some version of the emergency fund later this year, Hybl added.
“We understood the demand would be even greater, and we took some steps to increase in real dollars the programs in emergency areas,” he said. El Pomar “doesn’t feel bound” by the 5 percent payout figure, Hybl said, and may go beyond that later in 2009 “if the need is there.”
The Colorado Health Foundation said that it would increase 2009 spending over the $43.4 million in grants last year. One of the fund’s biggest assets is continuing ownership in the HealthONE hospital system, and health care profits were one of the few areas to hold up during the 2008 recession.
Many foundations say they are paring in-house expenses to preserve as many grants as possible. The Daniels Fund laid off four staff members and will not fill 2 1/2 open positions, said spokesman Peter Droege. The fund will support the same 250 college scholarships for needy students as in other years, he added, but has cut back on expenses, such as the length of intensive campus orientation that those students received before starting school.
The funds also are decreasing travel spending, holding video conferences instead of live meetings, and spending less on their office renovations, said Katherine Pease, a nonprofit consultant in Evergreen. They’ll have to continue close monitoring of investments and spending as unemployment rates soar and charities clamor for more help.
But their endowments will not recover soon, she added.
“It may take a generation or two, frankly, before they are going to catch up,” Pease said.
Michael Booth: 303-954-1686 or mbooth@denverpost.com
Leading charities cope with impact of economic downturn
Reactions to recession at top 10 Colorado foundations:
Daniels Fund
Mission: College scholarships, aging services, amateur sports, alcoholism and substance abuse, homeless services, etc.
Assets end of 2008: $983 million, drop of 27 percent
Program adjustments: Number of scholarships will stay the same; some grants will shift focus to emergency services and vulnerable nonprofits.
Colorado Health Foundation
Mission: Improving the health of Coloradans
Assets end of 2008: $955 million, drop of 5 percent
Program adjustments: Plans to increase giving in 2009 from $43.4 million in 2008. Has increased some “responsive” grants, including $25,000 to the Denver Foundation’s Critical Needs Fund.
El Pomar Foundation, Colorado Springs
Mission: Capital grants for schools, libraries, museums and others; support for social services and arts
Assets end 2008: $436 million, drop of 23 percent
Program adjustments: Giving will fall from $25.4 million in 2008 to about $23.5 million; major capital requests will be put on hold while focus shifts to human-services needs.
The Colorado Trust
Mission: Achieving access to health for all Coloradans
End of 2008: $337.1 million, drop of 34 percent
Program adjustments: Grants will increase from $22.3 million in 2008 to $26.8 million in 2009, to meet greater demand for services.
Denver Foundation
Mission: Funding social-service, arts and educational organizations; also manages funds for individual donors
End of 2008: $429 million, drop of 23 percent
Program adjustments: The portion that Denver Foundation controls will remain at 2008 levels.
Gates Family Foundation
Mission: Capital grants, including education, connections to nature and healthy lifestyles.
Assets end of 2008: $287 million, drop of 43 percent
Program adjustments: Giving is likely to fall from $22 million in 2008 to about $19.4 million this year.
Children’s Hospital Foundation
Mission: Supporting Children’s Hospital, sponsoring medical research, endowing research faculty
Assets end of 2008: $290 million; invested portion dropped 21 percent
Program adjustments: Gifts in 2009 will be “down slightly” from $30 million in 2008.
Rose Community Foundation
Mission: Giving to programs in aging, education, Jewish life and health services.
Assets end of 2008: $228 million, drop of 30 percent
Program adjustments: Grants from unrestricted funds might drop from $10.8 million in 2008 to $10.4 million this year.
Gill Foundation
Mission: Securing equal opportunity for all regardless of sexual orientation or gender expression
End 2008: $230 million, drop of 24 percent
Program Adjustments: Will increase payout as percentage of endowment to 7 percent; overall grant budget therefore will decrease only 4 percent.
Boettcher Foundation
Mission: Capital grants for construction, expansion or improvements of arts, education, health and community facilities
Assets end of 2008: $226 million, drop of 25 percent
Program adjustments: Grants paid will increase slightly, from $13 million to $13.2 million.
