As a non-profit organization with global programs, the World Resources Institute (WRI) has felt the effects of the economic downturn. We are taking deliberate steps to confront this challenge, with the objective of sustaining and strengthening our efforts.
WRI is on track to meet our budget and growth target of ten percent for the FY09 fiscal year ending September 30, 2009. It will be the third year in a row we have grown at such a rate. This vote of confidence from our contributors is particularly encouraging; it means we can aggressively continue to address today’s major environmental challenges. Eighty-four percent of our budget is project-related, which is primarily supported with restricted funding. Our program specific funding prospects continue to remain strong through FY10.
Our primary financial challenge is with unrestricted funding. This budget supports our operational infrastructure, new strategic program work, and our development and external relations departments. The unrestricted revenue budget makes up sixteen percent of our annual budget. We have historically funded forty percent of these critical areas by drawing upon our endowment fund. The other sixty percent comes from individual donors, family foundations and trusts, and corporations.
Market forces have significantly reduced the value of our endowment fund and are putting pressure on philanthropic budgets. Drawing from a reduced endowment to fill our unrestricted funding gap is not a financially prudent strategy. In forecasting our unrestricted sources and uses for FY09 and FY10, we have determined that with judicious cost-saving measures we can reduce our unrestricted expenses, operate without increasing support cost rates, and avoid staff lay-offs. In a move that underscores our passion for our mission, senior staff in departments reliant on unrestricted funding and executives have agreed to surrender one or two weeks of annual leave respectively, and to forego salary increases through FY10.
WRI conducts quarterly operational and financial reviews to ensure we meet our project milestones, donor requirements, and financial targets. Our “managing for results” approach and financial systems facilitate such reviews at the project, program, and organizational level, allowing us to flag new issues that may arise each month. Over the last several years, we have also improved efficiency and productivity in our administrative areas. All these measures have prepared us for the situation we currently face. To ensure that we are prepared for future uncertainty, we have developed several “worst case” scenario contingency plans through FY12.
I am particularly grateful for the steadfast support of WRI’s Board and in particular the hard work of our Investment Committee, which has helped keep a steady hand on the tiller as we have navigated turbulent equity markets. In addition, WRI’s executive team and staff have collaborated on an extraordinary basis to enable the thorough analysis and quick actions to keep us financially sound.
While we cannot predict the future, we are confident that with the continued support of our contributors, we will be able to weather this financial storm and accomplish our mutual, long-term goal of protecting the environment and improving people’s lives.
We are committed to transparency and maintaining an open dialogue with our contributors. If you have questions or would like to know more details about how we are faring, please feel free to contact me directly.