January 01, 2009
Knight Foundation Says It Is Cutting Costs, Not Grants, Due to Investment Losses
By Ian Wilhelm
The John S. and James L. Knight Foundation plans to meet its existing philanthropic commitments, but is cutting administrative costs due to investment losses, says Alberto Ibargüen, the fund’s president.
In a video on the foundation’s Web site, Mr. Ibargüen says that like other nonprofit groups, the organization has been financially hurt by the drop in the stock market. Yet he assured grantees and others that its programs are not threatened.
“While we have taken our losses, the foundation remains quite strong,” he says. “I’m especially pleased to assure you that Knight Foundation will honor all existing pledges and grants. We foresee no liquidity issues for the foundation.”
But he also says, “As good managers — and just as we expect of our grantees in these difficult times — we’ve taken steps to reduce our own expenses, including keeping all salaries flat, not hiring any open positions, and reducing expenses at every opportunity.”
Mr. Ibargüen, did not say how much the foundation’s assets have declined or whether it will decrease the amount of money it makes in grants in 2009.
Marc Fest, vice president of communications at the Miami foundation, told The Chronicle the most recent asset figure he had was for the end of 2007, when the foundation had $2.62-billion.
As for contributions to charities, the foundation does make an effort to avoid extreme cuts in its grant making during years when its investment portfolio suffers, he said in an e-mail message.
“That said,” he writes, “we’ll keep monitoring the markets, and our trustees may make adjustments to our payout budget and policy as warranted.”
The Bill & Melinda Gates Foundation and other foundations have issued similar statements about how they are dealing with the rough economic times.
One nonprofit expert estimates that foundation endowments have declined as much as 30 percent this year.
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