The following letter was sent to The McKnight Foundation's grantees in December 2008, outlining the Foundation's plans for grant payouts in 2009:

• To limit the recession's impact on grant payments, the Foundation will increase the percentage it draws from its own endowment in the coming year.
• While McKnight continues support for all current programs — children and families, region and communities, the arts, the environment, and select international work and scientific research — the Foundation will expand its strategies to mitigate catastrophic climate change.
• Although fewer funds will be available for new and returning grantseekers, McKnight pledges to honor all active grant agreements to completion.

he McKnight Foundation's grantees are our most important partners in our efforts to improve lives. Working together, we have a history of implementing thoughtful solutions to complex problems. In this, the current economy presents us all with unprecedented challenges, requiring our heightened collaboration and shared understanding. As we face these issues, we at McKnight are committed to keeping our valued partners informed about our grantmaking plans and priorities.

Earlier this year, the Foundation made a decision to expand our funding to fight catastrophic climate change. Our increased investment builds upon work we have pursued for decades and represents a timely extension of our central mission. Unchecked in the short term, climate change will affect our planet and its people for generations, endangering all those served by McKnight's programs. To accommodate this increased investment, we planned to slow the growth of other program areas.

As the economic downturn creates a troubling new context in which to expand our climate work, it also raises the issue's urgency. We believe strategic philanthropic investments made now can help chart a new low-carbon future, one that is good for the environment and the economy. Our region stands to benefit greatly from innovations in renewable energy production and transmission, a green workforce, and more. For these reasons, we believe now is exactly the right time — in fact, a critically important time — for McKnight to expand our work in this priority area.

Balancing McKnight's resources with the volatile economy and our longstanding mission and values, the Foundation's board of directors met recently to finalize our grantmaking forecast for 2009. Since January, McKnight has lost more than $700 million, roughly 30 percent of our endowment — a shocking loss, although generally on par with foundations around the country. To limit the impact on the communities we support, McKnight's board has authorized us to draw a larger than usual percentage from the Foundation's endowment next year. But the net result will not be status quo.

To honor all current commitments, support existing programs, and pursue new strategies to combat climate change, we will have less funding available for returning and new grantseekers in 2009.

There will likely be worthy new projects we are unfortunately unable to fund. Nonetheless, we will continue to make the majority of our grants in Minnesota, as we have for over 50 years, counting on regional grantees and community partners to foster the greatest outcomes through strategic collaboration, innovation and ingenuity, and advocacy for supportive policies. New and returning grantseekers with immediate questions are invited to talk with appropriate program staff.

Since the Foundation's early days, investing in smart people with good ideas has guided our work across programs and changing economies. Founder William L. McKnight famously sought to "discover and extract untapped potential in ideas, people, and markets." Never has it been more important to discover the untapped potential in all of us, individually and collectively.

Over the next few years, our communities will be tested by needs related to social services, a changing workforce, environmental challenges, and more. I believe that sharing our concerns, pooling good ideas, and seeking resourceful opportunities to support each other can better equip all of us to fulfill our missions and sustain vibrant, resilient communities.

As always, we remain profoundly appreciative of our partnerships and of the important work of organizations like yours.

Sincerely,

Kate Wolford
President, The McKnight Foundation