We do so in part because we believe that helping to restore health to our economy by creating jobs through business and technology innovation is the single most important way to boost all of the other areas of our grantmaking: education reform, neighborhood revitalization, youth development, and arts advancement.

REBOUNDING FROM RECESSION

The generosity of donors from all walks of life enables this foundation to play a prominent role in helping the region. We are pleased to report that the permanent endowment that generations of benefactors have entrusted to the Cleveland Foundation is healthy.

The foundation’s endowment continued to recover from the historic market downturn that began in late 2007 and drove our total assets from $2.2 billion down to $1.6 billion. Careful management by the foundation’s Investment Committee, professional advisors, staff, and our trust banks produced a 22 percent investment return in 2009. That performance, and $36 million in new gifts, boosted our portfolio by about $200 million to reach $1.8 billion by year-end 2009. Our investment growth through the first nine months of 2010 added another $45 million.

KEEPING OUR WORD

As a result, we were able to provide about $164 million in grants to the community in 2009 and 2010 amid still-challenging times. We pledged to help our local nonprofit organizations hit hard by the economic downturn. We made good on that promise. In 2009, our grant total fell by less than 6 percent in a year when the average U.S. community foundation cut grantmaking by almost 10 percent – the biggest average drop in at least 16 years. Then, in 2010, our grantmaking rose significantly, from $79 million to about $85 million, largely due to the generosity of our donors through their donor-advised funds.

Our founder, Frederick Harris Goff, envisioned this kind of stewardship when he created the country’s first community foundation – the Cleveland Foundation – 97 years ago. At that time, the city teemed with inventors pioneering new technologies in electricity, chemicals, metals, paints, and machining. Goff invented something equally profound: a perpetual grantmaking machine flexible enough to address the needs and seize the opportunities of any era.

Today, the Cleveland Foundation retains its innovative spirit and its place at philanthropy’s cutting edge.

THINKING GREEN

A prime example of philanthropic innovation is our leading role in creating a series of what we call Evergreen Cooperative companies. These companies are the product of collaboration among the foundation, City Hall, and several key foundation partners – Case Western Reserve University, the Cleveland Clinic, and University Hospitals.

These “anchor institutions” in University Circle helped us to create the new cooperative companies, which are helping low-income citizens obtain employment – and indeed become owners in their companies. The anchors are redirecting a portion of their combined $3 billion in annual procurement spending to buy local goods and services from these new enterprises.

To create jobs in Cleveland, the foundation is even looking abroad. Our experts are cooperating with Team NEO and other partners to lure foreign businesses here and open foreign markets to Cleveland’s exporters.

From its inception in 2006 through December 2010, Team NEO can claim credit for 41 new company expansions or relocations, 3,500 new jobs, and $135 million in annual payroll in Greater Cleveland. The foundation provided Team NEO more than $1.5 million in 2009 and 2010. Our contributions allowed Team NEO to hire an international-business-development specialist and target firms whose products and services complement emerging industries here, including advanced energy and medical devices.

R&D LEADS TO BUSINESS STARTUPS

We’re promoting research and development in those fields and in biotechnology, as our city’s bioscience institutions and companies continue to evolve into a global industry cluster. Cutting-edge R&D helps to save lives and treat illness, and it can also help save Cleveland by creating spinoff businesses. So we’re propagating it through grantmaking.

We provided $1.5 million in 2009 to Case Western Reserve University’s Center for Proteomics and Bioinformatics, where scientists manipulate proteins to treat and cure disease – and, we hope, eventually create startup companies. Our $5 million grant in 2005 launched that center and put Cleveland at the forefront of a booming field that garnered $375 million in federal research grants in 2009.

We’ve also supported the Cleveland Health Tech Corridor, a burgeoning biotech belt stretching from Case’s campus to Cleveland State University’s. The area already includes more than 75 biomedical companies, seven business incubators, and 45 other young tech firms. Among the corridor’s crown jewels is the $250 million Global Cardiovascular Innovation Center, a Cleveland Clinic-led collaboration to speed the commercialization of cardiovascular products.

GRANTMAKING AT THE GRASS ROOTS

The Cleveland Foundation is also bringing innovation to Cleveland’s neighborhoods.

Our affiliate program, Neighborhood Connections, is turning good ideas of neighborhood citizens into realities, with small grants, mentoring, peer networking, and leadership training.

Another grantee, Neighborhood Progress Inc., is using a $4.5 million grant to fight foreclosures, support redevelopment, and re-imagine the sustainability of urban neighborhoods.

Those neighborhoods can only be as strong as their people. So the foundation granted more than $3.2 million in 2009 and 2010 to the foundation-led MyCom collaborative. MyCom – My Commitment, My Community – is a joint venture with Cuyahoga County, the city of Cleveland, and other funders to provide underserved city youths with the kinds of life-enriching, responsibility-building experiences that middle-class children take for granted: summer jobs, out-of-school enrichment activities, and caring adult mentors.

In education, we’re investing millions of dollars and rallying support for what may be Cleveland’s last, best chance to save its public-school system. We elaborate elsewhere in this report on our bedrock belief that education reform in Cleveland is inextricably intertwined with our region’s capacity to innovate and thrive. Northeast Ohio will lose more generations of leaders and builders if Cleveland’s schools continue to fail our children. So we are resolved to bring innovation and change to the Cleveland Metropolitan School District.

INSPIRATION WITH ECONOMIC BENEFITS

We also established NewBridge, an after-school education center for teens and a job-training center for adults. NewBridge is a replication of Pittsburgh’s highly successful Manchester Bidwell training center, which has proved over several decades that a bright and stimulating environment staffed by caring educators can inspire students to become world-class citizens. Our $3 million grant helped NewBridge open an airy, inviting, and high-tech building in Midtown in 2010.

NewBridge offers programs for teens at risk of quitting school, and provides medical-career training for adults. Dedicated mentors use ceramics, digital arts, and other media to engage teens and inspire their innate love for learning. The curriculum for adults is designed with Cleveland’s leading medical institutions. Those hospitals are eager to hire NewBridge graduates into secure jobs as phlebotomists and pharmacy technicians, with pay and benefits averaging $32,000 per year.

We’re inspiring innovation in the arts too, especially on the business side. Cleveland’s arts and cultural organizations have long been civic jewels, but even our proudest must innovate to survive and thrive. So our Sustaining Excellence program is spurring and supporting them, with $1.4 million in 2010, as they experiment with new ways of operating.

We’re also bringing new art to our region through Creative Fusion, our international artist-in-residence program. Creative Fusion brings prominent foreign visual artists, performers, poets, and playwrights to Greater Cleveland to build relationships with our universities, young audiences, and local artists. Through it, we hope to diversify our historically Euro-centric arts scene and establish Cleveland as a globally welcoming arts center.

THE PEOPLE BEHIND THE PEOPLE’S FOUNDATION

Of course, innovation isn’t just a matter of coming up with new ideas. Innovation takes execution. Our staff excels at both. We’re proud of every one of our dedicated and talented employees. And we’re especially proud that the Council on Foundations named Executive Vice President Robert E. Eckardt as its 2010 Distinguished Grantmaker – the national philanthropy field’s highest individual honor.

Sadly, we lost one of our history’s bright lights in 2010: James A. “Dolph” Norton, who led the foundation from 1967 to 1973. Dolph upheld the highest ideals of public service and helped to create the modern community foundation. We are honored by his legacy.

Finally, we wish to thank this community. Your generosity, forward thinking, and confidence in your community foundation continue to inspire and challenge us.

As we go forward through 2011 and beyond, we will strive to earn that community trust every day.

Ronald B. Richard
PRESIDENT & CEO

JANUARY 2011

David Goldberg
CHAIRMAN OF THE BOARD