June 15, 2009 | Read Time: 2 minutes
The Robert Wood Johnson Foundation, in Princeton, N.J., is offering buyouts to 40 percent of its employees as the organization grapples with a big decline in its assets.
On Friday, the foundation offered 105 of its 250 staff members an “early retirement incentive program,” said David J. Morse, the fund’s vice president for communications. “We needed to try and make sure we and our grantees could continue to have impact and to get our administrative costs and expenses in line with our being a $7-billion foundation in terms of assets as opposed to a $10-billion-plus foundation, which we were about a year ago.”
The grant maker, which is the third wealthiest in America, experienced a 27-percent drop in its assets last year. While the stock market has shown signs of recovery in recent months, Mr. Morse said Robert Wood Johnson must deal with a new financial reality.
“Our assets will not in virtually any scenario we imagine get back to where they were for quite a while,” he said.
The foundation has offered the buyout to employees whose age and years of service add up to 70. It has also offered five “years of credit,” meaning that an employee who would qualify for the severance program by 2014 is eligible to take it today. Employees have six weeks to decide whether they will accept the deal.
Other grant makers have taken similar steps to reduce staff and trim costs. For example, the Ford Foundation, in New York, is offering 33 percent of it staff members a voluntary severance package.
In addition to the buyouts, Robert Wood Johnson cut its travel budget almost in half and closed a small office in Washington, said Mr. Morse. The office had no staff, but foundation employees visiting the nation’s capital would use it.
Risa Lavizzo-Mourey, the foundation’s chief executive, has also asked for grant recipients to send e-mail messages suggesting how the organization could streamline its operations and trim expenses.
The foundation expects to make $450-million in grants in 2009 and wants to award the same amount in 2010.
With President Obama having pledged to make big changes in national health-care policy this summer, Mr. Morse said the foundation, which focuses on improving health, wants to ensure it can continue to make big grants and capitalize on the political opportunity.
“We need to be able to make sure we can deploy as much in terms of resources as possible toward the work of changing health and health care,” he said.
