The financial crisis has forced the Calouste Gulbenkian Foundation to face two challenges – greater needs on the part of beneficiaries and falling donations.

Emilio Rui Vilar, President of the foundation, explains how the Foundation took up these challenges.

What impact has the crisis had on your Foundation?

By 31 December 2008, our balance sheet showed total assets of approximately €2.737 billion, a decrease in value of €380.8 million (or 12.2 per cent) over 2008, mainly owing to the investment portfolio’s poor performance in the stock markets. It could have been worse. Losses were to a certain extent offset by a better performance of investments made in the energy sector (oil and gas) and the appreciation of the US dollar.

How did you react?

When the gravity of the crisis became evident, our reaction was two-fold: not only did we adopt more prudent investment and expenditure policies but we also began seeking direct inputs from non-profit organisations that were experiencing a shortfall in support because of the crisis, just at a time when the demand for their services and goods was increasing. 

Largely as a result of our monitoring of the effects of the economic crisis on non-profits, we have given priority to tackling new or worsened incidences of poverty. To some extent, we have adopted a back-to-basics approach on the grant-making side to meet the most pressing needs such as employment, shelter, education and food. 

What concrete actions reflect your new priorities?

To help tackle the rise in poverty that has been affecting families in Portugal, we brought together a group of institutions and well-known individuals to launch a national campaign, País Solidário (Engaged Country), to raise funds for the most disadvantaged. The specific target of this campaign is the ‘new poor’, people who have suddenly lost their jobs but are not covered by public welfare mechanisms. We felt it was crucial to promote a quick and flexible response if we were to meet the basic needs of this group. Such campaigns are rare in Portugal, but we played a convening role and our credibility and experience have helped to launch a collaborative funding initiative that will give confidence to potential donors. 

The promoters of País Solidário together contributed €1 million in initial funding. Our goal now is to multiply this start-up amount during 2009 by calling on other institutions and the general public to contribute. As of July, the amount raised was around €1.4 million.

It’s also worth mentioning a couple of Gulbenkian initiatives that were not originally motivated by the crisis but which are now particularly relevant. One is the SIX (Social Innovation Exchange) 2009 Summer School on Social Innovation in July which focused on how social innovation could be an answer to the crisis. The other is the idea of a Portuguese Social Stock Exchange – along with other partners we are evaluating the possibility of funding something along the lines of the Brazilian model. While it is hoped that this project will provide a new impulse to Portuguese fundraising for non-profits, the main goal is to set up a framework to create social value by contributing to worthwhile projects in a transparent and reliable way.

What is the financial situation of the foundation today?

The forthcoming 2009 financial results will to a large extent dictate our 2010 budget guidelines, which will be announced by the board this autumn. We may need to introduce some additional budgetary constraints. We have been evaluating our expenditure policy continuously throughout 2009. In May the board decided on additional in-house savings measures to lower overhead costs such as business vehicles, leasing contracts and business travel expenses. As a result, we have not made, nor are we planning to make, any cutbacks in grants, at least for pressing social needs.