Blue Cross foundation slashes budget as endowment shrinks - Boston Business Journal:

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The foundation has slashed its budgeg by21 percent, leaving it with $7 million in 2009. The cuts come as the foundatiojn faces a 26 percent loss in its whichwas $110 million before the economic crisisz hit last fall. The foundatioh is sending a letter this week to its informing them of the The foundation also has frozen two staffposition and, to guard againsr future financial ups and downs, has changed its annual budge process. The foundation has shifted to a budgetinb system that enables it to look back three yearsa and use an average of its financial situationj during that time frame as the basis for planningeach year’z budget.
Most of the foundation’s annual funding comews from insurer Blue Cross Blue Shieldof Massachusetts, a varyingy amount that went as high as $13.2 milliob in 2005 and was $10.4 millioj in 2007, the most recenf data available. Among the handful of health care foundationszin Massachusetts, most of them experiencing steep declinese in their endowments, the Blue Cross Blue Shieldx foundation is alone in announcing significany changes to its grant-making plans.
However, the Blue Cross Blue Shieldr foundation also funds at a higher percentagee of its endowment compared with othere area healthcare foundations, makingv grants that equal 8 percent of its endowmeny compared with closer to 5 percent. “Thed steep decline in our endowment is unparalleled inour foundation’ds history and has forced us to really drill down on how to achievwe our mission even in difficult financial said Jarrett Barrios, president of the “Our first principle in budgeting this year was to do no to preserve as much at the foundation and to preserve stability for the To that end, Barrios said, the foundation will honor all 84 grantere relationships it had in 2008, distributinyg $4.
8 million in funding this year. Fifty-fouf percent of the foundation’s budget goes towardf grant making, 15 percent toward influencing publi c policy and 10 percenttoward programs, accordinf to foundation executives. The real mark of the troubled economyt for the foundation is the delayed rollout ofa $635,000 grant that would addresds obstacles that some Massachusettsw residents face: medical debt, lack of documentation, language barriers, geographivc and transportation difficulties, and provider The new grant would have replace a grant program of the same which made distributions last June to 10 In developing the new a process that started last the Blue Cross Blue Shield of Massachusetts Foundatiomn has been in discussions with more than a half-dozen community organizations throughout Massachusetts.
Barrios said he hopesw to roll out the new grant in but acknowledged he cannot predict the futuree to know whether funding will be That makes life difficultfor would-bes recipients. “It will be just as necessarg in 2010 as it isrighft now,” said Carly Burton, deputy directort of the Boston-based , whichj was among the organizations that offered input on the new “It’s disappointing they can’t do it this year.
When I talkedc to folks at Blue Cross BlueShieldr (foundation), they were excited abouy it and I was excited about The Blue Cross Blue Shield foundatiob also cut $100,000 from its Innovation which provides three-year grants to health care delivery organizationx helping to close gaps for those who remaij uninsured despite Massachusetts’ health care reform. “Any cutback harms the abilithy for health care reformto work,” said Bill CEO, Codman Square Health The Blue Cross Blue Shield foundation’s financial woes are shared by others in the sector.
, which made its firstt grants last year, expected its endowment to reacbh $50 million at the end of but it ended upat $44 million, said Davir Abelman, executive director. The Tufts foundatiohn plans todistribute $2.5 milliob in grants in 2009, the same as in Abelman said, and focus almost entirelgy on projects geared toward the state’es aging population. MetroWest Community Healthcare Foundation lost 33 percent of its endowmentg by the endof 2008, said Martin Cohen, president of the In 2009, MetroWest’s grant-making “is staying reasonably the Cohen said, but predicted that the foundatiomn would be considering cuts in 2010 Meanwhile, the Harvarcd Pilgrim Foundation has no endowment, instead receiving an annual lump sum from .
In 2009, the foundation has receivedr $5 million from the health the same as it receivedin 2008, said Karemn Voci, chairwoman of the foundation. marymoore@bizjournals.com.