(Host) Vermont’s non-profit organizations are worried that the downturn on Wall Street may mean that a major donor has less money to spend.
The groups are concerned about the Freeman Foundation, which has spent tens of millions of dollars on Vermont projects.
The foundation – which has offices in Stowe -was heavily invested in American International Group.
VPR’s John Dillon reports:
(Dillon) A very direct family connection ties the Freeman Foundation to the American International Group, the massive insurance company that’s at the center of this month’s global economic collapse.
One of the original founders of AIG was Mansfield Freeman, a former university teacher in China who in the early 1900s branched out into the insurance business. Freeman set up a charitable foundation funded in large part with AIG stock.
Mansfield Freeman had ties to Vermont; his son and grandson have lived part of the year in Stowe. They don’t want to talk about the foundation’s current health.
The Freeman Foundation reported assets in 2006 of $1.1 billion. It has literally helped maintain the architecture and the landscape of Vermont.
One of its main missions is to fund historic preservation and land conservation. The Preservation Trust of Vermont has been a major recipient. Paul Bruhn is executive director.
(Bruhn) “And they have granted over $10 million to us, which has been re-granted to local historic preservation projects around the state. And that’s played a very key role in over $125 million in actual rehabilitation work. So it’s had a huge impact.”
(Dillon) The Vermont Land Trust has also received millions of dollars. According to the land trust, the foundation has committed $65 million since 1994 to land conservation efforts.
The foundation’s work has also spread far beyond land and historic preservation. It contributed $25 million to the University of Vermont’s capital campaign. It’s paid for scholarships at Middlebury College and at nursing schools in Vermont. In 2006, Sharon High School got $150,000 from the foundation.
The foundation’s other main focus is on projects in Asia. And in recent years, the foundation’s contributions in Vermont have started to decline.
And now there are questions about how the stock market downturn has affected the foundation’s major asset of AIG stock.
The non-profit foundation has to disclose its finances in public tax returns. At the end of 2006 – the last year the tax returns are available for public inspection – the foundation owned about 11 million shares of AIG. At that time, the AIG stock was worth about $787 million, at $70 a share. Today, that stock is worth about $36 million, at roughly $3.30 a share.
Non-profit groups that have come to rely on the Freeman money might be worried. Felipe Rivera is with the Vermont Community Foundation in Middlebury.
(Rivera) "I can’t imagine that some non-profits are not going to see a real disruption in their work because they’ve been significant recipients of funding from Freeman.”
(Dillon) Rivera says non profit organizations, just like investors, need to diversify their portfolio. And, he says, they need a broad range of potential donors as well.
(Rivera) "You know, diversify your funding sources so that you’re not dependent on any one funder or a very small group of funders to support the good work that you’re doing.”
(Dillon) The tax returns show that the Freeman Foundation has begun to diversify its portfolio. In 2006, it sold about $180 million worth of AIG stock.
It’s not known if the company continued to diversify. The foundation prefers to keep a low profile. Trustee Houghton Freeman declined to comment for this report.
Mark Diamond is vice president of development and alumni relations at the University of Vermont. He says it’s too early to say what the stock market’s impact will be on the foundation’s charitable work. He says philanthropists often remain committed to their work despite financial pressures.
(Diamond) “So when times are bad and perhaps their assets drop, their commitment doesn’t go away and often what I’ve seen is people will actually make that decision to provide let’s say a higher portion of their income to philanthropy because those are really important commitments.”
(Dillon) The AIG wealth helped fund another foundation that’s made an impact in Vermont. The CV Starr Foundation – named for another company founder – has pledged $8 million to Middlebury College. As of 2006, most of the Starr money was invested in AIG stock.
For VPR News, I’m John Dillon in Montpelier.