Foundation Annual Reports

PAUL G. ALLEN FOUNDATIONS

505 Fifth Avenue South
Suite 900
Seattle, Wash. 98104
(206) 342-2030
http://www.pgafoundations.com

Period covered: Fiscal year ending December 31, 2001.

Note: These financial figures represent the aggregate sums for all six foundations.

Purpose and areas of support: In 1988, Paul G. Allen, co-founder of the Microsoft Corporation, established three foundations: the Paul G. Allen Charitable Foundation, the Allen Foundation for the Arts, and the Paul G. Allen Foundation for Medical Research. He has since created the Paul G. Allen Forest Protection Foundation and the Paul G. Allen Virtual Education Foundation, both in 1996, and the Allen Foundation for Music, in 1999. The six foundations share staff and board members, as well as office space.

In 2001, the Paul G. Allen Charitable Foundation paid grants totaling $25,767,321; the Allen Foundation for the Arts, $7,744,167; the Paul G. Allen Forest Protection Foundation, $2,371,101; the Allen Foundation for Music, $622,500; the Paul G. Allen Foundation for Medical Research, $601,992; and the Paul G. Allen Virtual Education Foundation, $345,000.

Unless otherwise noted, the foundations support nonprofit groups that benefit residents of Alaska, Idaho, Montana, Oregon, and Washington State.

The Paul G. Allen Charitable Foundation focuses on promoting the healthy development of vulnerable people and strengthening Pacific Northwest families and communities. Awards included $60,000 to Children First for Oregon, in Portland, to strengthen its management and communications capacity, to generate community support for its advocacy work, and to develop new public-policy activities.

The Allen Foundation for the Arts makes grants to spur cultural vitality in the Pacific Northwest, supporting artists and groups working in the literary, performing, and visual arts. For example, the Henry Art Gallery, in Seattle, received $75,000 for a touring exhibition that examines links between art, popular culture, and science.

The Paul G. Allen Forest Protection Foundation seeks to preserve ancient forests and other critical forest lands in the Pacific Northwest watershed, including Northern California and British Columbia. This foundation also accepts applications from Hawaii. In 2001, grant recipients included the Helena, Mont., office of the Nature Conservancy, which received $1-million to acquire land and conservation easements on properties in Montana’s Centennial Valley.

The Allen Foundation for Music supports popular-music programs and activities that bring musical forms not readily accessible to Pacific Northwest residents. The Seattle Symphony Orchestra, for example, received $35,000 for its Silk Road Festival, which featured concerts highlighting cultures along the Silk Road, the ancient trading route that extended from China to the Mediterranean Sea.

The Paul G. Allen Foundation for Medical Research supports programs and research that promote health, prevent disease, and improve practices in health-care delivery. There are no geographic restrictions on grants made by this foundation. Allocations included $350,000 to the Los Angeles-based Starbright Foundation, which serves seriously ill children, to plan and implement a major-gifts campaign.

The Paul G. Allen Virtual Education Foundation supports the innovative use of information technology to benefit students nationwide. For example, the Seattle Alliance for Education received $195,000 for the InfoTech Career Academy, which integrates language-arts, science, social-studies, and technology curriculums.

Application procedure: Application forms are available at the foundations’ Web site and may be submitted online. There are two deadlines each year: March 31 and September 30. Applicants will be notified of the foundation’s response by mail within five weeks after the deadline. Applications to the Paul G. Allen Virtual Education Foundation and the Paul G. Allen Foundation for Medical Research are by invitation only. In general, the foundations do not support operating or equipment costs. Additional information is available at the foundations’ Web site.

Key officials: Jo Allen Patton, executive director; Susan M. Coliton, senior director; Peter Berliner, senior program officer; Marie Kurose and Huong Vu, program officers; Jennifer Kilmer, grants administrator; Paul G. Allen, Jo Allen Patton, and Faye G. Allen, board directors.

LILLY ENDOWMENT

2801 North Meridian Street
P.O. Box 88068
Indianapolis, Ind. 46208-0068
(317) 924-5471

Period covered: Year ending December 31, 2002.

Purpose and areas of support: The endowment was created in 1937 by three members of the Lilly family — J.K. Lilly Sr. and his sons J.K. Jr. and Eli — through gifts of stock in their Indianapolis pharmaceutical business, Eli Lilly and Company. Although Lilly stock remains the most significant component of the endowment’s financial portfolio, it is not affiliated with the company and maintains a separate governing board, staff, and headquarters.

As of December 31, 2002, the endowment was the second-largest foundation in the United States, surpassed only by the Bill & Melinda Gates Foundation, in Seattle.

In accordance with the instructions of its founders, the endowment distributes grants in three program areas: community development, education, and religion. It also emphasizes related projects that benefit young people, promote leadership education, and boost financial stability at nonprofit institutions.

In 2002, the endowment approved grants totaling $649.2-million to 707 organizations, of which 260 were first-time grantees. Funds were distributed as follows: education received $361.2-million, or 56 percent of the total grants approved; religion, $233.9-million, or 36 percent; and community development, $54.1-million, or 8 percent. The previous year, the endowment had allocated 44 percent of grant dollars to community development, 39 percent to education, and 17 percent to religion.

Most Lilly grant money goes to programs in Indiana. Grants totaling $51.6-million were allocated to organizations in Indianapolis and Marion County, Ind., and $367.2-million went to organizations elsewhere in the state. Grants to organizations outside Indiana totaled $229.4-million, and grants to international groups totaled $1-million.

Education and youth grants focus on improving education in Indiana, with an emphasis on higher education and efforts to increase the number of Indiana residents who hold bachelor’s degrees. For example, through a program to encourage parents, students, alumni, and faculty and staff members to donate funds to their respective institutions of higher learning, the endowment made challenge grants of $3.5-million each to 38 colleges and universities in Indiana.

The endowment also gave $50,125,000 to Independent Colleges of Indiana, in Indianapolis, to administer the 2002-3 Lilly Endowment Community Scholarship Program. Since the program’s inception in 1998, it has covered the entire cost of college education for 1,320 Indiana students attending accredited, four-year institutions in the state.

Other grants made through the program included $3-million to the Ruth Lilly Center for Health Education, in Indianapolis, for the Health Education for the 21st Century program, and $49,900 to Villages of Indiana, in Indianapolis, to improve child-abuse-prevention services offered by four Indiana youth-service groups.

The religion and leadership-education program aims to “deepen and enrich” the lives of American Christians. The endowment made grants totaling $76,200,732 to 39 colleges and universities nationwide to establish programs that encourage students to consider the ministry as a vocation and to take religious values into account when choosing a profession. The endowment’s program for “sustaining pastoral excellence” allotted $57,829,873 to 47 religiously affiliated organizations in the United States, for sabbatical-type programs for ministers.

Other grants under this division included $1,483,429 to the Louisville Presbyterian Theological Seminary, in Kentucky, for its Web site “Resources for American Christianity” and other Internet projects.

Community-development grants emphasize the Indianapolis area, and focus on the arts and culture, economic development, human and social needs, inner-city and neighborhood revitalization, and low-cost housing. For example, a $4-million grant for general operating support went to the Central Indiana Corporate Partnership Foundation, in Indianapolis, a coalition of chief executive officers that carries out economic-development projects in the state.

Application procedure: Organizations with projects that fit the endowment’s guidelines — which are available upon request — may submit a preliminary letter of two pages or less with information about the organization, the project, and the amount of money requested. The endowment responds to all preliminary inquiries and will request a full proposal from those groups whose projects it feels warrant further consideration. The grant-review process takes three to six months, and all applicants receive written notification of the endowment’s decisions.

Key officials: N. Clay Robbins, president; David D. Biber, secretary and treasurer; Sara B. Cobb, vice president, education; Craig Dykstra, vice president, religion; William M. Goodwin, vice president, community development; Thomas M. Lofton, chairman of the Board of Directors.

KATE B. REYNOLDS CHARITABLE TRUST

128 Reynolda Village
Winston-Salem, N.C. 27106-5123
(336) 723-1456
http://www.kbr.org

Period covered: Fiscal year ending August 31, 2002.

Purpose and areas of support: The trust was endowed in 1947 through the will of Kate B. Reynolds, wife of William Neal Reynolds, a former chairman of the R.J. Reynolds Tobacco Company. Mrs. Reynolds designated one-fourth of the trust’s income to aid poor and needy people in Winston-Salem and surrounding Forsyth County, N.C., and the remainder to benefit poor patients in hospitals throughout North Carolina. In 1971 the trustees requested and received permission to expand the latter goal to include health and medical care for other needy North Carolina residents.

In fiscal year 2002 the trust approved 106 grants totaling $12,220,980 in its health-care division, and 41 grants totaling $4,502,173 in its poor and needy division.

Health-care grants seek primarily to increase the availability of health services to underserved groups, to promote good health and prevent illness, and to support studies that define health problems in North Carolina. Underserved populations include inner-city and rural residents, low-income and uninsured people, mentally and physically disabled individuals, people with HIV/AIDS and chronic illnesses, substance abusers, and victims of family violence. For example, After Gateway Inc., in Greensboro, received a three-year, $80,000 grant for a day health center that serves low-income adults with severe and multiple disabilities.

The poor and needy division supports groups that help meet the clothing, food, health-care, shelter, and other basic needs of people in Forsyth County. It also promotes programs designed to help disadvantaged people become more self-sufficient and reduce their reliance on support services. Emphasis is on criminal justice, early childhood programs and care, financial and legal counseling, job training and placement, mentoring programs, postsecondary education, social and cultural enrichment, and teenage-pregnancy prevention. Allocations included $200,000 over three years to the Second Harvest Food Bank of Northwest North Carolina, in Winston-Salem, to expand facilities and improve technology.

Application procedure: Before submitting an application, potential applicants must first call the foundation to set up a consultation. Applications for the health-care division are due on March 15 and September 15, or on the first business day thereafter. Applications for the poor and needy division are due on the first business day of January, May, and August. Information and grant-application forms are available at the trust’s Web site.

Key officials: E. Ray Cope, president; Joyce T. Adger, director, poor and needy division; John H. Frank, director, health-care division; Sara C. Smith, senior program officer; Marianne W. Cook, program officer; T. Ray McKinney, chairman of the Executive Council.