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

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The foundation has slashedc its budget by 21 leaving itwith $7 million in 2009. The cuts come as the foundatio faces a 26 percentf loss inits endowment, whicj was $110 million before the economic crisiss hit last fall. The foundation is sending a letter this week to its informing them ofthe situation. The foundatiom also has frozen two staffpositiond and, to guard against future financiap ups and downs, has changed its annuao budget process. The foundation has shifted to a budgetinhg system that enables it to look back three years and use an averagre of its financial situation durin that time frame as the basid for planningeach year’s budget.
Most of the foundation’a annual funding comes from insurer Blue Croszs Blue Shieldof Massachusetts, a varyin g amount that went as high as $13.2 milliob in 2005 and was $10.4 million in 2007, the most recent data Among the handful of health care foundatione in Massachusetts, most of them experiencingv steep declines in their endowments, the Blue Crosw Blue Shield foundation is alonwe in announcing significant changes to its grant-makint plans.
However, the Blue Cross Blue Shiel d foundation also funds at a higher percentagw of its endowment compared with other area healtucare foundations, making grants that equal 8 percengt of its endowment compared with closer to 5 “The steep decline in our endowmen is unparalleled in our foundation’s history and has forced us to really drill down on how to achieve our mission even in difficul financial times,” said Jarrett president of the foundation. “Our first principlw in budgeting this year was to do no to preserve as much at the foundation and to preservd stability forthe grantees.
” To that end, Barriow said, the foundation will honorr all 84 grantee relationships it had in distributing $4.8 million in funding this Fifty-four percent of the foundation’s budgeft goes toward grant making, 15 percent toward influencingb public policy and 10 percent towardd programs, according to foundation executives. The real mark of the troubledf economy for the foundation is the delayedr rollout ofa $635,000 grant that woulds address obstacles that some Massachusetts residents face: medicakl debt, affordability, lack of documentation, language barriers, geographic and transportatiohn difficulties, and provider shortages.
The new granrt would have replaced a grant program of thesame amount, whic made distributions last June to 10 In developing the new grant, a process that startesd last spring, the Blue Crosxs Blue Shield of Massachusetts Foundation has been in discussionxs with more than a half-dozen community organizations throughout Massachusetts. Barrios said he hopes to roll out the new grantin 2010, but acknowledged he cannotf predict the future to know whether fundin g will be available. That makes life difficulyt for would-be recipients.
“It will be just as necessarh in 2010 as it is right saidCarly Burton, deputyt director of the Boston-baseds , which was amongt the organizations that offered input on the new “It’s disappointing they can’t do it this When I talked to folks at Blue Cross Blue Shieldc (foundation), they were excited about it and I was excite d about it.” The Blue Crosx Blue Shield foundation also cut $100,000 from its Innovation Fund, which provides three-year grants to health care delivery organizationsw helping to close gaps for thosde who remain uninsured despite Massachusetts’ health care reform.
“Anhy cutback harms the ability for health care reform to work,” said Bill Walczak, CEO, Codman Squarew Health Center. The Blue Crosz Blue Shield foundation’s financial woes are shareed by others inthe , which made its first grants last year, expected its endowmentg to reach $50 million at the end of but it ended up at $44 million, said Davix Abelman, executive director. The Tufts foundation plans to distributes $2.5 million in grants in the same asin 2008, Abelmah said, and focus almosty entirely on projects geared toward the state’s agingt population.
MetroWest Community Healthcare Foundation lost 33 percentf of its endowment by the endof 2008, said Martin president of the foundation. In 2009, MetroWest’s grant-making “is staying reasonablt the same,” Cohen said, but predicted that the foundation woulrd be considering cuts in2010 Meanwhile, the Harvard Pilgrimj Foundation has no endowment, instead receivingt an annual lump sum from . In 2009, the foundation has receivedx $5 million from the healthh insurer, the same as it received in saidKaren Voci, chairwoman of the marymoore@bizjournals.com.