2022 Financial Information
This is the 25th Anniversary of the Community Foundation. We’re pleased to report the success that we had during the year 2022. We will also compare some of these results to our performance during the previous 25 years. The number of funds that were created in the past year, 38, was the largest ever achieved. The number of grants awarded, 3,660, was also the most ever awarded, and the value of these grants, $4,175,000, was the highest amount ever granted. The contributions we received, $6,806,000, was also a record amount surpassing last year by a million dollars.
However, in 2022 the economy presented challenges. Our investment income slipped to the second lowest we have experienced. This decline demonstrates the need to conservatively invest for the long term. Since our endowments distribute 5% of their principal as grants each year, the ability to make grants is protected from downturns in investment income. These downturns are completely expected. We don’t know when they will arrive, but we understand that they are inevitable. Our grantmaking is not dependent on the current investment income. Grantmaking is determined by the principal in the fund which, in the long run, is protected and increased by conservative, well-diversified investing.
Chairman of The Community Foundation
NUMBER OF FUNDS
The number of funds at the Community Foundation increased to 360, an increase of 38, which is the Foundation’s largest one year increase. The average value of an individual fund, $50,000, has steadily increased over the past ten years, moving rapidly as the Foundation started working with schools and financial institutions to administer funds for charitable programs.
The Investment Return, -17.99%, underperformed our average by a large amount. Our investment accounts hold both stocks and bonds, in a ratio of 60/40. This is a very common way to invest funds for long term stability, and this approach has yielded very high reward in the recent past. But in 2022, much changed. Both political and economic decisions caused stocks to fall 18% and long-term Treasury bonds to slump 29%.
Our worst year in the past 25 years was 2008. We recovered from that downturn in less than 2 years. Our current disappointing investment returns will not have a long-term effect on our funds. Our average investment return, including the past year, is 8.29 percent after all investment and administrative costs.
The Contribution Income is the amount of income that is received from all sources except investment income. Since the annual return on our investments cannot be controlled on a yearly basis, contribution income is a more objective way to evaluate the annual performance of our organization. Our Contribution Income has risen steadily for the last seven years following the large increase that resulted from fundraising for the Endless Mountain Health System’s new hospital. In 2022 our Contribution Income was $6,806,000, almost 1 million dollars more than last year.
Our Total Assets declined in 2022 to $25,207,059 due to the loss in our investment income. Even though the loss was substantial, it is less than the amount of our gain in total assets in the prior year. In 2008, we had another larger loss in our investments. In the following year, we overcame the 2008 loss to achieve a record level in total assets, and for the next 14 years we had an average annual growth in assets of more than $1.5 million per year.
NUMBER OF GRANTS
The number of grants totaled 3,660, an increase in the year 2022 of 878 or 31.5%. This is a record number of grants, and it is the result of serving many more schools and other organizations. 129 schools received scholarships. These scholarships pay for many different kinds of tuition, specialized training, vocational schools, college credit awarded to high school students and traditional postsecondary college curricula.
TOTAL VALUE OF GRANTS
The total value of all grants exceeded $4,175,000 which was the largest amount of grants ever awarded. Many of the grants were scholarships although other non-profit organizations and charitable causes also received funding. Most of the financial support was concentrated in the northeastern part of our state, but there is an increasing level of participation from schools and other organizations throughout the Commonwealth.
Our Endowment Assets, $18,857,776, is the amount of money that is invested in our funds. Each of our funds is individually managed so the timing of a grant by one fund does not affect the value of another fund. The total amount of our Endowment Assets declined in 2022 due to the decrease in value of all asset categories.
OPERATING EXPENSE RATIO
This ratio is the amount of money spent on operations of the Community Foundation compared to Contribution Income. This ratio, 8.47%, increased slightly in 2022 but is still well below the average of most non-profit organizations. The Community Foundation of the Endless Mountains is a division of Commonwealth Charitable Management, Inc. This organization is responsible for all activities of the Foundation and both organizations have the same board of directors and management. All reports presented here pertain to both organizations and are consolidated for all reports.