El Paso's two largest foundations have rebounded from multimillion-dollar losses in their investment portfolios in 2008 when Wall Street crashed in the midst of a national financial crisis and economic recession.
The foundations use profits from investments to provide grants and other money for various programs and organizations in the El Paso area.
The value of the Paso del Norte Health Foundation's investment portfolio declined $70.5 million in 2008, dropping its total assets to $149.1 million, the foundation's financial reports show. That is the lowest asset level since the foundation was formed in 1995 with $130 million from the sale of then not-for-profit Providence Memorial Hospital.
The foundation, which funds programs solely from its investment income, is aimed at preventing disease and promoting healthful lifestyles in El Paso and Hudspeth counties, Juárez and Southern New Mexico.
The El Paso Community Foundation, which includes nine affiliated foundations and other organizations, saw the value of its stock and bonds portfolio decrease $25.7 million in 2008, dropping its total assets to $73.2 million -- $25.2 million less than in 2007.
The Community Foundation uses its investment income and public contributions to fund a wide variety of community projects, including urban redevelopment, education and the arts.
Its signature project was spearheading the revitalization of the Plaza Theater Downtown.
Paso del Norte's total assets were $194.3 million at the end of last year, and are now at around $202 million, still below the peak of $230.5 million at the end of 1999.
"It (stock market) goes up and down, so we hang on," said Myrna Deckert, president and CEO of the foundation. "Most endowments and foundations don't overreact to ups and downs in the market. It always comes back, but it may take a while.
"We are very close to having total recovery," she said.
The Community Foundation's assets grew to $95.9 million at the end of last year. Its total assets are now close to their $100.9 million peak in 1999, said Eric Pearson, executive vice president of the foundation.
"We pulled up our boots and trudged through it," Pearson said.
Deckert, of the Paso del Norte Foundation, said a combination of the foundation's investment losses and a transition in program spending as it changed its focus in 2008 resulted in less money being given out for grants and contracts in recent years.
In 2008, the Paso del Norte board revised the foundation's strategy to focus on health-related initiatives for children and youths. It currently has initiatives aimed at preventing smoking, encouraging healthful lifestyles to combat obesity and promoting healthy sexuality. It also has a leadership program for health-care managers in this region, and it is part of a coalition working on a regional health-care services plan.
The foundation spent an average $5.2 million for grants and contracts in the past three years, down from an average $8.4 million from 2005 through 2007.
The foundation expects to announce some large initiatives later this year, which will increase its commitments for grants and contracts, Deckert said.
It has given out $110 million in grants and contracts since 1998, the first year it began funding programs, Deckert said.
The private foundation by law must spend an average 5 percent of its net assets each year on grants, contracts and expenses, Deckert said.
The Community Foundation didn't decrease spending on grants and programs as its investment portfolio decreased because not-for-profit organizations needed more funding during hard economic times, Pearson said. The foundation is now pulling back a little to help "shore up" its assets, he said.
It spent $4.7 million last year on grants and program expenses. That's down from the $6.1 million it spent in 2009, and the $4.9 million spent in 2008, the foundation's financial reports show.
The Community Foundation isn't required to pay out a certain amount of money each year because it's a public charity under federal tax laws. But its policy is to spend 3 to 7 percent of its assets each year for grants and expenses, Pearson said.
The Paso del Norte Health Foundation's investment portfolio -- valued at $193.3 million at the end of last year -- is now about 60 percent in stocks, about 30 percent in bonds, 5 percent in real estate and 5 percent in private investment funds, reported Robert Ash, chairman of the foundation's investment committee. Ash is also administrator of the city of El Paso's employees pension fund.
"To keep our grant programs at a high level, our (investment) consulting firm says we need to be more in stocks than bonds," Ash said.
The foundation employs Chicago-based Hewitt Ennis Knupp as its investment consultant and 12 out-of-town investment funds managers.
"We've made a lot of it (investment losses) back," Ash said.
"If we had not been in equities (stocks) and made a sea change, and invested only in bonds, we would have lost the big increases we've seen in the last couple of years."
The foundation aims to earn an average of 7 percent per year on its investments, he said.
Paso del Norte made one change because of the 2008 market decline. It created an "opportunistic class" to put 5 percent of its portfolio in investments that exploit short-term changes in market conditions, Ash said. Right now, that portion of the portfolio is in bank loans and convertible bonds, which pushes the foundation's bond holdings to about 30 percent, he said. That has reduced its stock holdings, which in past years had been around 70 percent.
The Community Foundation's investment portfolio -- valued at $88.4 million at the end of last year -- is now 70 percent in stocks and 30 percent in bonds and other fixed securities, reported Russell Hill, chairman of the Community Foundation's investment committee and an El Paso lawyer.
The foundation employs Nena Brackett of UBS Financial Services in Houston as its investment consultant and has more than 20 El Paso and out-of-town funds managers.
Its investment portfolio has earned an average 8.5 percent per year after expenses since 1990, Hill said.
"We acted with concern (when the market declined), but we are all part of this country, and we have to bet the country will come back, as it has largely," Hill said. "You can't put the money in a mattress and stay there."
Vic Kolenc may be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; 546-6421
More information: www.pdnhf.org; www.epcf.org
Financial standings
Total assets of El Paso's two largest foundations in recent years:
Paso del Norte Health Foundation
El Paso Community Foundation
Sources: Paso del Norte Health Foundation and El Paso Community Foundation financial reports.
