It was hard to find any good economic news last year, yet Spokane businessman Mike Senske did.
He is leading the new philanthropic foundation created with $79 million from the sale of Deaconess Medical Center and Valley Hospital and Medical Center to Community Health Systems Inc.
Much of the money, wired on Sept. 30, could have been lost in the stock market catastrophe that followed.
But the Empire Health Foundation board took the safe investment route: They put the money in Treasuries.
“We didn’t lose anything,” Senske said last week. “I guess that’s the good news.”
Good news? Just about anybody with money in the market wishes he or she could say that.
The $79 million since has been invested in a series of money market funds that are deep into other government notes. It’s a safe place for money that is expected to flow into regional charities or new programs designed to meet the area’s pressing health needs – a mission that could become even more important as state-funded programs see their resources shrink.
The money for a new foundation, which is now the region’s largest, was a major selling point in the sale of the two nonprofit hospitals to Community Health Systems, the nation’s largest for-profit hospital chain.
Senske said the board anticipates making its first round of grants in 12 to 18 months.
The board’s investment committee currently is trying to set a profitable yet prudent investment policy so that grant-making doesn’t whittle the principal $79 million investment.
The Empire Foundation board plans to hire a professional staff to run the foundation’s business affairs and conduct community outreach, Senske said.
Across the country, foundations have seen their endowments shrink while charities have seen a drop in donations, according to Charity Navigator, which tracks contributions.
Even such savvy investors as the state’s three large nonprofit health insurers have watched as tens of millions of dollars in surplus savings have disappeared with the market drop.
Charity Navigator predicts that giving in 2008 will have fallen by 15 percent compared with 2007.
With its $79 million endowment, the Empire Foundation could become as important in the region as the Comstock Foundation once was. That foundation – established from the wealth of the Comstock and Shadle families – gave more than $31.5 million throughout the Spokane region during its 50-plus years of existence, disbursing the last of its funds eight years ago.
Another significant player in the region is the Inland Northwest Community Foundation.
Chief executive Mark Hurtubise said the foundation’s endowment has fallen 22 percent during the past six months, from $62 million to about $48 million.
Despite the losses, the community foundation has continued to make grants to an array of regional charities spanning Eastern Washington and North Idaho.
One is the New Leaf Bakery and Café, a program run by local nonprofit Transitions. Transitions helps women who are unable to get or hold a job because of missing skills or for personal reasons.
Run by Sheila Fitzgerald, a nun, the program started in June and recently received $30,000 from the Inland Northwest Community Foundation.
“These kinds of gifts and grants are what help us make a difference in people’s lives,” Fitzgerald said. “They are tremendously important.
“Many of the women in our program have children, and many of them have experienced some major setbacks in life like domestic abuse, or drug and alcohol abuse, that prevents them from succeeding.”
New Leaf helps about seven women at a time. They work in a kitchen, learning food service skills. They also take a turn in the café itself, making retail sales, arranging catering events and learning about customer service.
It’s another piece of what Transitions is trying to accomplish: providing a safe place for women, helping them beat problems and providing training so they can lead better lives.
New Leaf is now operating out of a kitchen owned by Catholic Charities. The program plans to use the grant – just one of the 24 worth $392,000 made recently to various organizations by the community foundation – to establish a retail space in north Spokane and eventually expand its kitchen.
Despite the Inland Northwest Community Foundation’s financial losses, Hurtubise said the organization plans to issue grants next year because it uses a system that continually gauges its performance during the past 39 months.
This “13 rolling quarter” evaluation allows the foundation to offer grant-making consistency over the long-term rather than allowing its mission to be whipsawed by market fluctuations.
Yet if the financial meltdown continues and the community foundation sustains 18 months of continuous losses, giving in the year 2011 and 2012 could be jeopardized.
“Let’s hope it doesn’t come to that,” Hurtubise said.