Letter from Steve McCormick
A note on our response to the economy
March 24, 2009
This is my first communication since becoming President of the Gordon and Betty Moore Foundation a little over a year ago, and my original intention was to recognize and celebrate our grantees’ accomplishments in 2008 and to share some observations about moving from the NGO sector into the foundation community. But the serious consequence of the dramatic decline in the financial markets, and the continuing uncertainty and volatility of the economy, compels me to focus instead on how we are responding to the situation.
We, like virtually all foundations, have experienced a significant decline in the value of our endowment. Fortunately, through prudent oversight by our Investment Management Committee, and the impressive performance of our investment team, our diversified portfolio declined 25% in 2008. Our outlook at the end of last year was one of cautious optimism. But further declines in early 2009 have caused us to be much more sober and careful in making plans for the coming years. We will, therefore, significantly reduce our grant making in 2009, and we anticipate lower levels of funding in 2010 and 2011. While the absolute number of funding dollars will be less than 2008, the payout rate will actually be higher this year, almost 6% of our endowment. In making these adjustments we are committed to the following:
Honoring financial commitments. We will honor in full all financial commitments we have made through Grant Award Letter Agreements.
Staying focused. We will remain dedicated to our long-standing initiatives -- Andes-Amazon, Wild Salmon Ecosystems, Marine Conservation, Marine Microbiology, and the Betty Irene Moore Nursing initiative. This website contains details on the content and scope of these initiatives. In addition, we remain committed to our pledges of support to the California Institute of Technology, the Thirty Meter Telescope, the Betty Irene Moore School of Nursing, and Conservation International.
Working closely with our grantees. We will engage actively with our grantees to keep them informed on issues germane to our mutual areas of interest, and to work with them to create alternative approaches to accomplishing outcomes.
Reducing our operating budget. We will make reductions in our operating expenses that do not significantly diminish our effectiveness or our ability to maintain close, productive relationships with grantees. We will indefinitely suspend creating any new positions at the Foundation.
We are fully aware that fundraising in this climate is enormously challenging. And, having come recently from the NGO community myself, I know personally how difficult and painful it is to deal with decreased financial support. I understand not only the impact on the missions our grantees so ardently and admirably pursue, but also the impact on the wonderfully passionate people who devote their lives to making the world a better place.
We greatly admire, and are deeply grateful for, the extraordinarily important work of our grantees. We are committed to helping them continue the invaluable contributions they are making to fulfill our founders’ vision of “creating positive outcomes for future generations.”
Steven J. McCormick
President, Gordon and Betty Moore Foundation