July 9, 2009
Dear Colleague,
I last reported to you in early May about how the Foundation has been affected by the steep and persistent economic downturn. RWJF’s financial assets have declined substantially and we anticipate that, even when the economy recovers, they will remain lower for at least the next several years.
In my May letter, I outlined what RWJF is doing to meet the mandate of our Guiding Principles that “we are stewards of private resources that must be used in the public’s interest.” This demands careful, responsible management of all things fiscal, and I shared what we are doing to control our costs so that we can continue, together, to make a significant, demonstrable difference in health and health care for all Americans. We have cut back dramatically on staff travel, created major administrative efficiencies and are considering further ways to reduce our operating costs. As in most organizations, our largest operating expense is our staff--the people who design, execute and lead our grantmaking. So we will be reducing our staff costs by reducing the size of the RWJF workforce. As you may have seen reported in The New York Times and The Chronicle of Philanthropy, we are offering a voluntary retirement program to eligible staff, as a major step toward getting our operating costs in line with our reduced assets and our plans for future grantmaking. We intend to be a smaller but an increasingly effective philanthropy. While we can’t and don’t know the full nature of the restructuring, we will strive to maintain continuity with you and your programs.
Our Guiding Principles also tell us that “As investors in and partners with other organizations, we depend for our success on our grantees and our colleagues.” I see us as a community of individuals and organizations working in common cause to serve the common good. Our commitment to this work is not changing. And so, in 2009 and 2010, we will still be providing about $450 million in programming each year. This is well above our required payout level. We remain committed to the objectives and timeframes for each of our program areas, and are not eliminating any grants that are under way. We will continue to convene key players in health and health care who are essential to our mutual success. We will continue to provide strategic communications support to help you disseminate your achievements and maximize your impact, and provide technical support and assistance.
Even as we maintain these commitments we will be looking to work with you to become more efficient. In May, I noted that you--our grantees and colleagues who are our partners in improving health and health care--are experiencing many of the same effects of the recession. I asked you to share your plans for reducing your costs, in the form of “one-minute memos.” Many of you responded rapidly and realistically with suggestions about how you, too, could be more effective and efficient while remaining focused intensively on meeting your goals.
Many of you are:
• Maximizing the role of technology–Replacing print with e-communications, and using video conferencing rather than in-person meetings.
• Re-thinking meetings – Downsizing essential face-to-face gatherings by keeping them local or regional, heading to more economical venues, and/or shortening the duration.
• Collaborating more–Sharing resources, office space, and expertise with like-minded organizations.
• Re-purposing –Finding new life for existing products and research; using existing travel for multiple purposes; “layering” multiple single-site activities to make the most use of time and resources.
• Renegotiating –Saving money by renegotiating lease agreements, travel arrangements, and even office equipment rentals.
• Controlling salaries and benefits –Keeping salaries static, reducing levels of benefits, not filling vacant positions and reducing staff size.
These ideas are smart and strategic, and I encourage all of you to consider these practices. Even with these changes, our ability to make new grants and create programs will be greatly reduced in the immediate future. As I said in my May letter, we remain committed to your work, but given the continuing downturn, we plan to reduce some authorizations for grants not yet awarded as well as some awards that are active. We will be working with you to reduce your expenses so that we can together maximize our impact.
This is an evolving process and I hope it will be a continuing dialogue. I invite and encourage you to keep sharing updates on how you are doing your work in a more effective and efficient manner. Feel free to share your thoughts and updates at the same e-mail address: oneminutememo@rwjf.org.
Yes, the way forward, together, is terrifically challenging. But our vision is crystal clear, and our commitment to stay the course unshakeable. This—our quest for impact and for making a difference in health and health care—is a great mission, one I’m very proud to be sharing with you.
I look forward to continuing the journey and the conversation.
Risa
Risa Lavizzo-Mourey, M.D., M.B.A.
President and CEO
