James E. Canales
President and CEO
Every March, the Irvine Foundation Board of Directors meets for two days to reflect upon the Foundation’s progress and consider longer-term strategic issues outside of our regular board meeting cycle. This year’s meeting was particularly noteworthy because we comprehensively reviewed all three of Irvine’s core grantmaking programs of Arts, California Perspectives and Youth. We launched these three programs in 2003-04, following a comprehensive planning process, and now with five years of grantmaking behind us, we saw our meeting as an opportunity to discuss what we have learned, what has changed and how we may want to refine the programs. Our annual report later this year will report on some of the specifics for 2008, but I wanted to focus in this letter on some of the broader themes discussed and next steps identified.
Our aspirations in each program area are ambitious and our board reaffirmed its commitment to them over the long term. But we also discussed the value of ongoing refinements in our strategy. We acknowledge that maximizing progress toward our program goals requires that we learn as we go, increase our support for the approaches that work best, and take advantage of opportunities that may arise as we execute our plans.
For example, in the Youth program, we are focusing our grantmaking in a more targeted way on multiple pathways, which we consider a particularly promising approach to high-school reform. You can read more about this refinement in this issue’s Q&A with our Youth Program Director Anne Stanton. Our other two programs — California Perspectives and Arts — are also refining their strategies while staying committed to the goals we set several years ago. We will describe these refinements in upcoming issues of the Irvine Quarterly and through future updates on our Web site.
I’d also like to use this opportunity to update you on our expectations for overall grantmaking this year. As you well know, we are in the midst of one of the most challenging economic environments in more than 25 years, with significant impact for the nonprofit community. Through our ongoing communication with our grantees, we are well aware of the difficulties facing many nonprofits today and have sought to be responsive to our partners in helping them to navigate these challenging times. The economic downturn has affected Irvine as well, with our endowment value down more than 30 percent over the past 14 months.
In my Fall 2008 letter, I reported that we hoped to keep our 2009 grantmaking budget at least even with the $78 million in grants we awarded in 2008. Since the publication of that letter, the recession has deepened further and our endowment has continued to experience losses. Unfortunately, this means our 2009 grantmaking will almost certainly be less than 2008, even with the smoothing formula we use to decrease fluctuations in our grantmaking from year to year.
Despite this overall reduction in grants this year, the grant budgets for our three core programs (Arts, California Perspectives and Youth), plus our Cross-Program grants, will not be reduced from what we had planned for this year. We begin each year with a portion of our overall grants budget in reserve for special, one-time opportunities or to augment program budgets during the year. It is this unallocated portion of our budget that will absorb any reduction to our overall grantmaking this year, so that we can maintain our commitment to the goals and recently refined strategies of our core programs. I will continue to keep our partners apprised through these letters and other communications as the year unfolds.
We recognize that these challenging times place additional strains and pressures on our grantees and the people that they serve, and we appreciate everything they are doing in service to the people of California.
As always, I welcome your questions, comments or suggestions.
James E. Canales
President and CEO