Dear Friends, The New Year always brings with it a sense of renewal and possibility for the future. And while it may be hard to muster a sense of optimism about the fiscal challenges that face California, there is plenty of evidence that 2011 presents an opportunity to make progress toward the kind of long-term, structural reforms that will begin to address our state's chronic fiscal and budgetary challenges. Toward this end, Irvine and four other major California foundations recently renewed our commitment to California Forward, the bipartisan reform effort our foundations helped establish in 2008 to seek long-term solutions to the state's underlying governance problems. As a group of funders, we continue to believe that without the kind of systemic reform that California Forward is pursuing, the outcomes our foundations care about — whether in education, health care, the environment or economic development — become more elusive. Since its founding, California Forward has advanced the cause of governance reform through its contributions to the passage and implementation of Proposition 11, the redistricting initiative, and in helping to frame the legislative debate around budget and fiscal reform. In its first three years, California Forward has established itself as a respected, bipartisan entity, and it is now launching a broad public outreach campaign aimed at informing policy development and building the coalitions that will help to push additional reforms forward.

For more about California Forward's outreach campaign, I invite you to read the Q&A with Executive Director Jim Mayer in the current issue of Irvine Quarterly.

Among the reasons to be optimistic about progress in 2011: First, a new governor who has repeatedly talked about structural reform as one of his top priorities. Second, an electorate that demonstrated its willingness in the November election to take on difficult issues and pass a set of substantive changes to our fiscal system. Third, the recent establishment of the Think Long Committee for California, a nonpartisan group of prominent concerned citizens founded by investor Nicolas Berggruen, who has pledged $20 million to help pass important structural reforms to California's dysfunctional system of governance. The committee's creation represents an exciting opportunity to build on the current momentum for reform.

As California faces yet another round of budget cuts to fill a $25 billion deficit, the contemplated reductions in public services threaten disproportionately the very populations at the heart of the Irvine Foundation's mission: low-income and underserved Californians. While it is necessary to address the deficit in the short term, what this chronic budgetary wrangling makes clear is that we also need long-term, fundamental restructuring of California's fiscal system and policies. I invite you to learn more about California Forward's agenda for 2011 and to engage with them as they reach out to Californians on issues that have profound implications for the future of our great state.

As always, I welcome your questions, comments and suggestions. As another tool to facilitate our communications with you, I'm pleased to report that I'm now active on Twitter as part of a broader Irvine effort to use social media for our work. I invite you to follow me at twitter.com/jcanales.

Sincerely,

James E. Canales
President and CEO