Our Commitment to Balancing Financial Stewardship and Programmatic Interests

November 2014

The Rockefeller Brothers Fund’s lasting commitment to issues of global significance reflects the Rockefeller family’s philanthropic tradition. Since 1940, the Fund has made a long-term commitment to its mission and to its partnerships with grantees, peer foundations, and thought leaders in its efforts to achieve progress in its programmatic interests.

The Fund is committed to balancing its financial stewardship responsibilities with its commitment to advance social change that contributes to a more just, sustainable, and peaceful world. The Fund’s endowment experienced a significant loss, resulting from the 2008–2009 recession, dropping to a low of approximately $609 million in March 2009. Although the portfolio has experienced market growth since that period, uncertainty and volatility remain, creating exceptional challenges for the annual budget process. Each year, the Fund seeks to develop spending plans that balance fiscal responsibility and the critical needs of our programmatic interests. Economic downturns challenge both objectives.

Given actual 2008 and 2009 portfolio performance, net of spending, the Fund’s payout requirements declined, reflective of its lower portfolio value. Recognizing the critical needs of its programmatic interests and grantees in these challenging economic times, the Fund’s grantmaking level exceeded the required distribution amounts, generating excess distributions of approximately $36.3 million over the period 2009 through 2013. Despite the ability to utilize these credits over a five-year period against future IRS spending requirements, the RBF’s long-term philanthropic commitments compelled it to minimize reductions in its programmatic spending.

In anticipation of near-term budget pressures, continued market volatility, and eventual growth, RBF trustees and staff launched a process in 2011 to develop a shared vision of the relative scale of its programs at the end of this decade and a resource allocation plan to achieve it over the coming years. While not binding on the RBF’s future leadership, the shared vision on the relative scale of programs in 2020 is intended to aid priority setting and near-term resource allocation decisions related to spending rates, program budgets, staff, and other infrastructure investments. This 2020 vision supports the Fund’s commitment to maintaining its grants budget at a steady level with its programmatic spending of approximately $26 million, set in 2011. This decision to deploy its financial assets in excess of the payout rate mandated by the IRS. evidences the Fund’s long-term commitment to manage the delicate balance of sound financial responsibility with its long-term and critical programmatic engagement.

Looking ahead, the Rockefeller Brothers Fund hopes to continue to balance its financial stewardship responsibilities with its long-term commitment to its grantmaking programs and to its grantees across the globe.