With a dozen major foundations operating in Jamestown, Lakewood and Dunkirk, Chautauqua County might very well be the philanthropy capital of the world with almost $10 million being returned to the community each year.
This has been a difficult time for the men and women charged with managing those endowments since they collectively have hundreds of millions of dollars invested in stocks, bonds and other financial assets that have suffered dramatically over the past few months.
The Gebbie Foundation alone lost an estimated $20 million, roughly 25 percent of its endowment, when the stock market crashed following the financial collapse of September and October.
John Marino, Gebbie Foundation executive director, believes it will be some time before the market bounces back, and with it the endowment.
''My sense is it's going to be years before we are where we were last September when this started,'' Marino said.
Before the stock market crashed late last year, losing half its value in a matter of weeks, the Gebbie Foundation's endowment reached as high as $86 million. Every year, at least 5 percent of the endowment is returned to the community in the form of economic development grants, and that money has paid for such projects as the construction of the Jamestown Savings Bank Ice Arena, the upgrade of alleyways throughout the downtown area and building improvement projects up and down North Main Street.
Even in bad times, the Gebbie Foundation is still required by law to return to the community at least 5 percent of its endowment each year, Marino says.
That 5 percent isn't what it used to be. The 25 percent blow to the endowment translates into a $500,000 reduction in the foundation's annual contributions, according to Marino. Though the Gebbie Foundation is continuing to serve the ice arena's debt and pay for projects like the North Main Street facade improvements, its economic development arsenal has been limited.
''Last fall, we decided to continue to support these things that are moving the community forward because didn't want to see that momentum stop,'' Marino said. ''We can't be quite as creative as we could have been.''
In the fall, says Marino, the foundation's board of directors will hammer out a blueprint for 2010, and that's when board members will have a better understanding of just how the organization will be affected by the economic downturn.
PROLONGED AGONY
Years ago, the Gebbie Foundation changed its focus, devoting all its efforts to economic development in Jamestown. Organizations like the Ralph C. Sheldon Foundation and the Chautauqua Region Community Foundation, the second and third largest foundations in Chautauqua County, were there to fill the void, but each has been affected by the economic downturn.
''Our portfolio reflects the general stock market, so it's down that much,'' said Linda Swanson, Sheldon Foundation executive director. ''It reflects the S&P.''
And in the aftermath of last fall's financial meltdown, the S&P 500 was down 45.5 percent - its worst drop in history since the Great Depression.
According to Ms. Swanson, the Sheldon Foundation has many multi-year commitments, so it will be returning more than the safe and mandatory 5 percent of its endowment. To weather the ongoing financial storms, the foundation is not committing itself to any new programs and capitol projects for the time being, she said.
''The length and depth of a recession like this just kind of prolongs the agony,'' Ms. Swanson said.
No category of financial asset has proven itself safe, she added, so no matter how diverse a foundation's portfolio was, that organization has suffered a blow from the financial collapse.
''There's been nowhere to hide,'' she said.
PEAKS AND VALLEYS
The Chautauqua Region Community Foundation, a collective of approximately 500 different individual endowments each with their own individual purposes, had a collective value of almost $60 million before the stock market crashed, according to Randy Sweeney, CRCF executive director.
At the end of 2008, the CRCF's value was between $48 million and $50 million, says Sweeney, though the annual contributions of its individual funds didn't suffer as much of a drop as other foundations.
According to Sweeney, the Community Foundation determines the annual contributions of its individual funds using three-year averages. The fourth quarter of 2008 would therefore be weighed against the previous 11 quarters, when the stock market was running strong.
''It helps smooth out the peaks and valleys in the market,'' Sweeney said. ''The concern would be for 2010 and possibly 2011, depending on how long the market stays down.''
Managing the foundation's portfolio is a complicated task, especially given the complexities of the market. Times like these are tough, says Sweeney, because foundations can't give back as much as they want to.
''That's the hardest part. Donors created these funds for charitable purposes and they were very eager to give back,'' Sweeney said. ''Sometimes in these situations, we're not able to give back as much as we wish we could.''