Chad Peterson,
Chair
Kevin Dvorak,
President
2008 Chair and President's Report
Each year, as we prepare the document that you hold, we sit down to write a letter to you that reveals a bit about our work. As the Foundation has grown and had more and more effect on the lives of the citizens of North Dakota, it has been a pleasure to highlight our successes, growth and the activities of those supported by the Foundation’s grants.
We are pleased to report that the NDCF received over $3.5 million in gifts in 2008 and made over $5.9 million in grants. For the Foundation, those are good results. This all occurred in a year in which we could not ignore the “elephant in the room” that was the economic and investment climate.
According to those who study such things, we have just been through the worst ten-year period for stock returns ever! One of the ironies in this is that the NDCF really started to take off in the late ‘90s; just in time for the worst ten-year investment period ever. Over that ten-year period, the NDCF has given over $16 million in grants and received $35 million in gifts. Isn’t this the beauty of a permanently endowed foundation? Even through terrorist attacks, foreign wars, and financial crises, the NDCF kept working to provide essential resources to serve the needs of the citizens of North Dakota.
In 2008, the overall return on NDCF’s portfolio was -21.7%. For comparison, Harvard’s Endowment was down 30% in the second half of 2008, the Massachusetts Audobon Society was down 28% and a Council on Foundations study showed that the average loss for 127 foundation survey respondents was 28%. To put this in perspective, even with the last ten years in the mix, the overall average return on NDCF’s portfolio from 1990 through 2008 was 6.34%.
Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.-Benjamin Graham
This type of investment situation puts those who hold permanent endowment like the NDCF in a quandary. Do we pull in our horns and suspend grantmaking until markets and endowments recover? Do we keep making grants and further erode the value of our endowments?
The programs supported by NDCF grants are facing these financial challenges as well. We can tell you that in the past, the North Dakota Community Foundation Directors have taken the stance that our grants are even more critical in times like these - hard times.
You cannot live a perfect day without doing something for someone who will never be able to repay you.- John Wooden
There will certainly be difficulties and probably smaller payouts for a period of time going forward, but we can tell you that the NDCF will weather this financial storm. The NDCF’s investment policy is closely coupled to its spending policy with the goal of preserving buying power of the endowments over the years. The Board has been prudent in their investment decisions by diversifying and investing for the long-term as no one invests more for the long-term than a permanently endowed foundation.
Every defeat, every heartbreak, every loss, contains its
own seed, its own lesson on how to improve your performance the next time.
-
Og Mandino