--- Begin Message --- Title: FW: American Prospect /Schumann Foundation comment
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From: "Bob Feldman" <[EMAIL PROTECTED]>
Date: Sat, 27 Apr 2002 14:00:14 -0400
To: <[EMAIL PROTECTED]>
Subject: Fw: American Prospect /Schumann Foundation comment
One of The American Prospect magazine's founders, Robert Reich, is now seeking the Democratic Party nomination for governor in Massachusetts. So now might be a good time for left populist readers of The Nation to recall how the Montclair, New Jersey-based Schumann Foundation has helped bankroll Massachusetts gubernatorial candidate Reich's American Prospect magazine in recent years.
In 1998 a $1 million "philanthropic" grant was given to The American Prospect by the Schumann Foundation "for continued support of efforts to increase national impact of The American Prospect through greater financial security and more aggressive marketing." And in 1999 an additional $5.5 million "philanthropic" grant from the Schumann Foundation was given to Reich's magazine to "help the Prospect expand from publishing bimonthly to publishing biweekly, and to include more commentary, personal essays and cultural coverage." (Foundation News & Commentary, 10/99)
Some of the Schumann Foundation grant money given to The American Prospect was derived from an apparently unscreened foundation portfolio which has included in recent years stockholdings in weapons manufacturers, pro-war media conglomerates, tobacco companies and oil companies. According to its Form 990 filing with the IRS in 1999, for instance, the Schumann Foundation's $92 million stock portfolio contained stock in Lockheed Marietta ($196,000), Raytheon ($185,000), Viacom ($1.1 million), Cablevision Systems Inc. ($1 million), Time-Warner ($723,000), Seagram ($225,000), Philip Morris ($343,000) and Exxon Mobil ($1 million). From its 1999 stock portfoliio dividends, the "non-profit" Schumann Foundation earned a net 1999 investment income of $2.7 million.
In addition to receiving dividends from its corporate media stockholdings and distributing over $7.6 million in philanthropic "media grants" to publications like The American Prospect in 1999, the Schumann Foundation was also involved in the U.S. media world in other ways. According to its Form 990 filing, the executive editor of Public Affairs TV, Inc.--Bill Moyers--was paid an annual salary of $201,076 and given an expense account of $8,036 for also serving as the Schumann Foundation's president in 1999. And the president of Public Affairs TV, Inc.--former Columbia Journalism Review publisher Joan Konner--was also a member of the Schumann Foundation's board of trustees in 1999. Coincidentally, when Public Affairs TV, Inc. president/Schumann Foundation Trustee Konner was the Columbia Journalism Review's publisher, that magazine also was given hundreds of thousands of dollars in tax-exempt grant money by the Schumann Foundation.
It's too early to tell what the partisan political prospects are for American Prospect founder Reich's 2002 gubernatorial candidacy in Massachusetts. But it does look like the prospects for another U.S. military-industrial-media complex war escalation in Iraq in 2002 are good. So readers of The Nation who oppose any new U.S. war escation in Iraq might consider asking The American Prospect founder and the Schumann Foundation president whether they think the public interest is served by Big Foundations investing in war stock, pro-war media conglomerates, tobacco companies and Big Oil firms--during the "Cheney-Rumsfeld-Wolfowitz Era" in U.S. history of "Permanent War."
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<A HREF = "/about/email.htm"><FONT SIZE="-2" FACE="helvetica,ariel">Feedback</FONT></A><BR> <IMG SRC="/icons/space.gif" ALT=" " WIDTH="130" HEIGHT="7"><BR> <A HREF = "/about/privacy.htm"><FONT SIZE="-2" FACE="helvetica,ariel">Privacy Policy</FONT></A><BR> <IMG SRC="/icons/space.gif" ALT=" " WIDTH="130" HEIGHT="7"><BR> <A HREF = "/help/help.htm"><FONT SIZE="-2" FACE="helvetica,ariel">Help</FONT></A><BR> </TD> <TD WIDTH=15> <IMG WIDTH=15 HEIGHT=1 SRC="/icons/space.gif" ALT=""><BR> </TD> <TD VALIGN=TOP WIDTH=455> <IMG WIDTH=455 HEIGHT=48 SRC="/icons/flag_gifts.gif" ALT="The Chronicle of Philanthropy"><BR><BR> <DIV ALIGN="RIGHT"> <FONT SIZE=-1>From the issue dated April 4, 2002</FONT><BR><BR> </DIV> <DATA> <STORYTEXT> <H2>Foundation Assets Sag</H2> <B>Nation's largest grant makers see decline of 10 percent</B><P> By Ian Wilhelm<P> <p>A declining stock market pulled <!-- ##alsosee## --> <TABLE CELLPADDING=10 ALIGN=LEFT VALIGN=TOP WIDTH=200><TR><TD> <HR NOSHADE SIZE=1> <FONT SIZE="-1"><B>ALSO SEE:</B></FONT><BR><BR> <FONT SIZE="-1"><A HREF="/premium/stats/foundation/2002/">2002 Foundation Giving Survey</A></FONT><BR><BR> <FONT SIZE="-1"><A HREF="/premium/articles/v14/i12/12000801.htm">Cutbacks Take Toll on Programs to Improve Charity Operations</A></FONT><BR><BR> <FONT SIZE="-1"><A HREF="/premium/articles/v14/i12/12001801.htm">How <I>The Chronicle</I>'s 2002 Foundation Survey Was Compiled</A></FONT><BR><BR> <FONT SIZE="-1"><A HREF="/premium/articles/v14/i12/foundations_charts.htm">2002 Foundation Giving: Related Charts</A></FONT><BR><BR> <HR NOSHADE SIZE=1> </TD></TR></TABLE> <!-- ##alsosee## --> down the assets of most of the nation's largest private foundations in 2001, leading more than 100 of them to cut or freeze their grant making for this year, according to a new <I>Chronicle</I> survey.</p> <p>Foundation assets fell by a median of 10 percent last year among 131 grant makers that reported data for fiscal 2000 and 2001, meaning that half of the funds posted declines greater than 10 percent.</p> <p>The survey also found that:</p> <UL> <p><FONT SIZE=-1><LI></FONT>Among 133 foundations, the median value of grants approved in 2001 declined 0.5 percent from 2000. </p> <p><FONT SIZE=-1><LI></FONT>Thirty-four of 152 foundations providing information on their giving said they expected their grant making to decline this year, while 86 said it would remain roughly the same.</p> <p><FONT SIZE=-1><LI></FONT>Assets of six of the 10 largest foundations declined last year, for a combined loss of $10.6-billion. Assets of the remaining four funds rose by a total of $4.7-billion.</p> </UL> <p>The decline in assets in 2001 follows a year in which endowments had already faced trouble in the stock market. Last year's <I>Chronicle</I> survey found that assets of 128 big foundations declined by a median of 0.3 percent from 1999 to 2000.</p> <p>The foundations in the survey represent a big chunk of the foundation world's wealth. The 142 foundations that provided asset figures were worth $176-billion in 2001; total assets of the 50,000 foundations in the United States were $448-billion in 1999, the most recent year for which figures are available. </p> <p>The Bill & Melinda Gates Foundation, in Seattle, topped <I>The Chronicle's</I> list of the 10 largest grant makers for the third consecutive year, with $23.3-billion in assets, up 10 percent from 2000 because of a $2-billion gift the Gateses made to the fund early last year. The foundation will use the gains to support its primary missions of improving global health and public schools and libraries.</p> <p><B>Forecast for 2003</p> <p></B>In interviews, many foundation officials said that while the economy has improved in recent weeks, they could not say whether their giving would rise in 2003. Most foundations base their giving budgets for the current year on the size of their endowment the previous year.</p> <p><P>The cuts in grants strain nonprofit groups at a time when the organizations face many financial challenges caused by the downturn that rippled through the nation the past year. Corporate grant making is tight as companies seek ways to cope with sluggish profits. Government budgets are being cut, especially at the state level, threatening to decrease support for many charities. </p> <p>What's more, the White House is asking nonprofit groups to play an expanded role in civic life. President Bush wants Americans to dedicate 4,000 hours over their lifetimes to charitable work, and he has asked charities to help find volunteer positions for them. Because the administration has earmarked relatively little federal money for the proposal, nonprofit groups will need money from foundations and other private sources to complete the task.</p> <p></P><B>Packard's Losses</p> <p></B><P>One of the nation's largest private funds, the David and Lucile Packard Foundation, in Los Altos, Calif., is planning some of the most drastic cuts after its assets fell to $6.2-billion last year from a high of $13-billion in 1999. Packard, which fell from fourth to fifth place in <I>The Chronicle</I> rankings, expects to pay $406-million in grants this year, a decline of $57-million. </p> <p>What's more, it plans to approve only $250-million in new grants in 2002, a decrease of more than $400-million from 2001. The cut will affect all of Packard's grant-making areas, which include conservation, assistance to poor families, and projects that improve the management and operation of charities.</p> <p>"The current financial realities necessitate some adjustments," said Carol S. Larson, director of the foundation's programs. "We can't do as much for everyone."</p> <p>The Ford Foundation, in New York, remained in third place despite a 20-percent decline in assets, to $11.3-billion. Ford, which plans to trim its giving this year, blamed the drop on stock-market losses, but a spokesman declined to identify specific investments. The foundation committed $275.5-million -- the largest grant in its history, as well as the largest grant in 2001 by any foundation -- to start the International Fellowships Fund, which provides money for graduate-level education in 15 areas of study. Ford's asset loss, while steep, pales in comparison with the more than 50-percent decline the foundation suffered during the stock-market crash of 1972-1974. </p> <p>Ford's troubles are eclipsed by those at Packard, which invests nearly all its money in Hewlett-Packard Company stock. The shares have fallen about 80 percent in value since January 2000, the result of a general decline in technology stocks and a battle over a merger deal with the Compaq Computer Corporation.</p> <p>While Packard fell in value, a foundation established by the family that represents the other half of the Hewlett-Packard nameplate appeared on the top-10 list for the first time. </p> <p>The William and Flora Hewlett Foundation, in Menlo Park, Calif., jumped into the lineup because of a bequest, mainly of Hewlett-Packard stock, from William Hewlett, the co-founder of the company, who died in January 2001.</p> <p>That bequest, the first of three scheduled payments from Mr. Hewlett's trust, increased the grant maker's assets from $3.9-billion to $5.9-billion. Even so, the foundation does not plan to add programs or increase its giving this year, said Laurie Hoagland, the foundation's treasurer.</p> <p>Not included on this year's <I>Chronicle</I> list of the 10 largest funds was the Gordon E. and Betty I. Moore Foundation, in San Francisco, which is expected to receive about $5-billion from the sale of Intel Corporation stock next February from Mr. Moore, the company's co-founder.</p> <p></P><B>Increasing Giving</p> <p></B><P>While most foundations that experienced a decline in assets are tightening their purse strings, some are resisting such a move.</p> <p>"Even though our assets are down, we felt we should try to maintain our giving this year," said Stanley N. Wellborn, a spokesman for the Annie E. Casey Foundation, in Baltimore. Casey, which distributes most of its grants to programs that help foster children and poor families, experienced a 13-percent decline in assets from $3-billion to $2.6-billion last year. It plans to approve about $186-million in grants this year, said Mr. Wellborn, an increase of more than $1-million.</p> <p></P><P>To avoid more steep losses, the foundation plans over the next five years to divest a large amount of its holdings in United Parcel Service, which it received from founder Jim Casey, a former chief executive of UPS. "It's like people who had Enron in their 401(k)'s and nothing else," Mr. Wellborn said of the foundation's reliance on UPS stock.</p> <p></P><B>'Not a Good Climate'</p> <p></B><P>Even though some forecasters predict that the worst of the nation's economic and stock-market troubles are over, many foundation officials believe that money could be scarce for new or expanded projects at least until 2003.</p> <p>"New programs, new organizations, new initiatives will be a tough sell in the next year or two," said P. Russell Hardin, vice president of the Robert W. Woodruff Foundation, a fund in Atlanta founded by a former Coca-Cola Company president.</p> <p>Woodruff's assets fell to $2.4-billion last year, down $717-million, or almost 23 percent, because of the organization's heavy investment in Coca-Cola stock, which suffered a decline of nearly an identical percentage in 2001. As a result, the foundation, which supports charities in Georgia, may reduce its giving by as much as $33-million, Mr. Hardin said. The cuts, he added, would be across the board.</p> <p>Even foundations whose giving remains relatively stable are discouraging new projects. "We're saying, 'Wait,'" said Sherry Magill, president of the Jessie Ball duPont Fund, in Jacksonville, Fla., which plans to keep its grant making steady at $12.5-million this year. "It's not a good climate for new projects." </p> <p>The foundation, which supports religious organizations, private colleges, and social-service groups, mostly in the South, lost $63-million, or 17 percent of its $353.9-million in assets, last year. </p> <p>Grant makers with fiscal years that begin in late 2002 may appear on the survey to have raised the amount of their giving, but some are actually pulling back. For example, the Kate B. Reynolds Charitable Trust, in Winston-Salem, N.C., lost 17 percent, or about $109-million, of its $617.8-million in assets last year, but its current grant-making budget is almost $27-million, about $1-million higher than its previous one.</p> <p>However, the fund works on a fiscal year from September 1 to August 31 so the effect of its asset decline will not hit grantees until fall, said E. Ray Cope, the foundation's president. Unless the organization's assets recover, the trust will reduce its giving by $2.7-million for its next fiscal year, he said.</p> <p>"Our giving is probably going to be down around 10 percent," Mr. Cope said. "We will have to be much more selective and probably not be able to make the size grants that we have made."</p> <p></P><B>Trimming Spending</p> <p></B><P>With assets falling, many foundations are trying to trim overhead costs to free money for grants. The Packard Foundation has cut its travel budget and scrapped plans to move to a new building to consolidate its employees. The James Irvine Foundation, in San Francisco, whose assets fell from $1.5-billion to $1.4-billion last year, plans to review its staff size, the associations it belongs to, and the conferences it attends, said Mary G. F. Bitterman, who became the fund's chief executive officer in February. </p> <p>As foundation giving declines or remains frozen, many charities are scrambling to find other sources of funds or pulling back on programs.</p> <p>The Arts Council Silicon Valley, in San Jose, Calif., may have to tap its general fund to cover a shortfall in its operating budget if it doesn't find new supporters, said Bruce W. Davis, the organization's executive director. The council received $100,000 last year from Packard for its general operating budget. This year Packard plans to give the council only $70,000 because the foundation is cutting its support for arts groups from $15-million to $5-million.</p> <p>Likewise, Public Campaign, an advocacy group in Washington that focuses on overhauling campaign-finance laws, is cutting programs to make up for a loss of more than $1-million in grants. In 2000, the group received $1.3-million from the Florence and John Schumann Foundation, in Montclair, N.J. Last year, the amount was $15,000. </p> <p>"We've been forced to knock back statewide citizen initiatives aimed at winning laws supporting full public financing of elections," said Nick Nyhart, Public Campaign's executive director. "We've also been forced to cut back on a print-ad campaign."</p> <p>Schumann is reducing its grant making from $7.1-million to $3.5-million after its investments dropped significantly in value, according to a letter the foundation provided a nonprofit group inquiring about support. The foundation's woes were compounded by a board decision several years ago to dip into its endowment to pay for efforts to change the campaign-finance system. The Schumann Foundation doesn't appear in <I>The Chronicle's</I> survey because it declined to provide detailed financial information. </p> <p></P><B>Examining Effectiveness</p> <p></B><P>Problems like those of Schumann aside, some foundation experts said that good may come from the past year's economic upheaval.</p> <p>Grant makers grew so quickly during the past decade that many struggled to distribute 5 percent of their assets for charitable purposes, as they are required to do annually by federal law, said James Ferris, director of the University of Southern California's Center on Philanthropy and Public Policy, in Los Angeles. Now that economic gains have slowed or stalled, foundations can concentrate on making their programs more effective and not duplicate the work of others, he said. </p> <p>"It's an opportunity for philanthropy to take stock," Mr. Ferris said. "We're at a position where we can really consolidate the gains, and philanthropy can try and figure how to operate in a world where there are a lot more philanthropic resources." </p> <p>Mr. Ferris suggested that grant makers work with others to make their giving more effective, and a few foundations are doing just that.</p> <p>Packard is working with Ford and Hewlett, for example, to ensure that Packard grantees are not left out in the cold as the grant maker reduces its support, said Ms. Larson, the organization's program director.</p> <p>Even foundations flush with money are working with other grant makers. Gates is collaborating with the Ford Foundation, the W. K. Kellogg Foundation, in Battle Creek, Mich., and the Carnegie Corporation of New York to build public high schools in the United States.</p> <p>"No one entity can do it alone," said Joe Cerrell, a Gates spokesman.</p> <p>Still, collaborative efforts may not be enough to satisfy critics who contend that many foundations are acting too hastily in cutting grants because of the carnage on Wall Street.</p> <p>"It seems some foundations have reacted out of great caution, perhaps an overreaction to the market," said Rick Cohen, president of the National Committee for Responsive Philanthropy, an advocacy group in Washington. Cutting or freezing grants "may not be warranted, simply because the market has its ups and downs, and it's likely it will be up again," he said. </p> <p>Grant makers greatly benefited from the bull market of the mid-1990s, Mr. Cohen said. "Over the past five years, what is the impact of three bad quarters out of 20?"</p> <p>In fact, the endowments of many foundations have doubled or even tripled in the past decade, with assets growing at a median annual rate of 7 percent as recently as three years ago. But some grant makers argue that if they substantially increased giving during lean times they would jeopardize their endowments.</p> <p>At the Woodruff Foundation, for example, Mr. Hardin, the fund's vice president, worries about what would happen if the foundation didn't cut its grant making to match declines in its endowment's value: "Two or three years more like 2001, and we're out of business or close to it."</p> <p></p> <BR> <p></P><FONT SIZE=-1>Michael Anft, Debra E. Blum, Marni D. Larose, and Martha Voelz contributed to this article.</FONT></p> </STORYTEXT> </DATA> <HR NOSHADE SIZE=1> <TABLE CELLPADDING=0 CELLSPACING=0> <TR> <TD VALIGN=BOTTOM> <A HREF="/cgi-bin/printable.cgi"><IMG SRC="/icons/print.gif" ALT="Print this article" WIDTH="35" HEIGHT="35" BORDER="0"></A><BR> </TD> <TD VALIGN=BOTTOM> <FONT SIZE="-2"><A HREF="/cgi-bin/printable.cgi">Easy-to-print</A> version</FONT><BR> </TD> <TD WIDTH=20> <IMG SRC="/icons/space.gif" ALT=" " WIDTH="20" HEIGHT="1" BORDER="0"> </TD> <TD VALIGN=BOTTOM> <A HREF="/cgi-bin/emailer.cgi"><IMG SRC="/icons/email.gif" ALT="e-mail this article" WIDTH="36" HEIGHT="17" BORDER="0"></A><BR> </TD> <TD VALIGN=BOTTOM> <FONT SIZE="-2"><A HREF="/cgi-bin/emailer.cgi">E-mail</A> this article</FONT><BR> </TD></TR></TABLE> <HR SIZE=1 NOSHADE> <FONT SIZE="-1">To comment on this item, send a message to <A HREF="mailto:[EMAIL PROTECTED]";>[EMAIL PROTECTED]</A></FONT> <HR SIZE=1 NOSHADE> <FONT SIZE=-1><A HREF="/about/copyright.htm">Copyright</A> © 2002 The Chronicle of Philanthropy</FONT><BR><BR> </CENTER> </TD> <TD WIDTH=7 VALIGN=TOP> <IMG SRC="/icons/space.gif" WIDTH=7 HEIGHT=1 BORDER=0> </TD> <TD WIDTH=1 VALIGN=TOP BGCOLOR="#000000"> <IMG SRC="/icons/space.gif" WIDTH=1 HEIGHT=1 BORDER=0> </TD> <TD WIDTH=7 VALIGN=TOP> <IMG SRC="/icons/space.gif" WIDTH=7 HEIGHT=1 BORDER=0> </TD> <TD COLSPAN=2> </TD> <!-- Right column: BEGIN --> <TD WIDTH=150 VALIGN=TOP ALIGN=CENTER> <IMG SRC="/icons/space.gif" WIDTH=0 HEIGHT=0 BORDER=0><BR> <A HREF="http://ad.doubleclick.net/jump/gifts.cop/;sz=120x930;num=47896?";> <IMG SRC="http://ad.doubleclick.net/ad/gifts.cop/;sz=120x930;num=47896?"; border=0></A> <IMG SRC="/icons/space.gif" WIDTH=0 HEIGHT=0 BORDER=0><BR> </td></tr></table> </BODY> </HTML>--- End Message ---
