Oklahoma’s largest private nonprofit foundation, The Samuel Roberts Noble Foundation, recently had assets totaling $1.2 billion, an amazing treasure chest of hope for institutions, funds and grants across the state.
In 2006, the foundation gave out more than $8 million to scholarships, research, medicine, the arts, schools, ministries, the needy, even a new rescue vehicle for the town of Springer’s volunteer fire department.
In 2007, that giving swelled to more than $11 million, with $5 million going to construction of the OU Cancer Institute, along with an endowed chair position. Langston University got new computer equipment, the Carter County Sheriff’s Department got a new firing range, and Central Oklahoma Habitat for Humanity got $100,000 for its Hope Crossing development.
Not this year.
Instead, the Noble Foundation posted this message on its Web site: “We currently have a sizeable number of outstanding commitments, both in our granting and in our operating programs. Our Board has concluded not to consider any new grant applications in 2009.”
No new fire trucks. No new cancer clinics. No new scholarships.
“Our downturn was just about what the Dow Jones experienced, which is probably close to what a lot of people experienced,” said Michael A. Cawley, the foundation’s president and CEO. “We were down for the year “¦ the Dow was down 37 percent. That’s what we were.”
That kind of shortfall translates to about $440 million, dropping the foundation’s funds to roughly $800 million. Cawley said the foundation must now concentrate on its ongoing commitments ” primarily to agricultural research and giving ” to which money has already been pledged. This amount will still be a substantial sum, he said.
“Last year, when you pool all of that together, we expended about $50 million for charitable purposes,” Cawley said. “We’ll expend at least that much, because of existing commitments, this year. So, while we are not considering any new applications, we still will be making considerable contributions to charitable society. It’s commitments we said we would pay and we will.”
Charitable organizations operate similarly to 401k retirement plans or mutual funds. Cash donations are often rolled into accounts that grow a “nest egg,” allowing the foundation to grow steadily, and with it, giving.
The recent downturn, however, took with it a lot of those eggs.
WORST IS YET TO COME
However, the worst is yet to come, said Frank Merrick, president of Communities Foundation of Oklahoma.
“Basically, we give away 5 percent of our monthly averages,” Merrick said. “The first half of 2008 wasn’t bad. The second half of 2008 was horrible. The first two months of 2009 were horrible. This means our giving is going to be down slightly for 2009. But in 2010, our giving is going to be down substantially.”
Nancy Anthony, executive director of the Oklahoma City Community Foundation, said the real harm for many charitable foundations is not what happens here and now, but what happens to the future of that foundation’s giving.
“We are going to be harmed in a very significant way because the bulk of our assets have been invested into equities and other financial markets that have just taken a horrible beating,” Anthony said. “Over the next three or four or five years, the earnings that are going to be available to make contributions or grants to direct service agencies are going to be less. “¦ It’s not an immediate thing “¦ but it’s going to begin to happen soon, and it’s going to last for a while. It’s going to be a while before those endowment dollars come back.”
The charitable organizations that are really going to be harmed are those that operate off of “current gifts,” she said. Such dollars are used for utility payments, rent or other immediate uses.
“About a third of our contributions are in current gifts,” she said. “That’s where you are going to see an immediate impact.”
Dan Straughan, the executive director of the Homeless Alliance, an organization that coordinates giving for various causes on behalf of the homeless in Oklahoma City, said organizations like his will suffer in the recession.
Records show that the Homeless Alliance received a pledge of $250,000 from the Noble Foundation in 2007. That, however, may be it for the near future.
“It’s going to be a tough couple of years,” Straughan said. “As resources are decreasing, needs will be increasing. We see unmet needs already, and that will likely get worse.” “Ben Fenwick