During 2009, the value of Houston Endowment’s investments increased from $1.248 to $1.431 billion. The $183 million increase included $78 million in grant payments and expenses and a net investment increase of $105 million. Total investment return (income plus capital appreciation), after investment fees, for the year was 17.2 percent. The average annual compound return for the past five years, net of fees, was 4.6 percent; and for the past 10 years, it was 4. 1 percent.

At year-end, the foundation’s endowment was invested as follows:

Grant Spending

In 2009, Houston Endowment’s allocation for grants was $92 million. Each year’s grant allocation is based on five percent of a three-year average of the endowment’s market value. The goals of this spending policy are to provide a relatively stable pattern of spending on grants, despite fluctuations in security markets, and to preserve the inflation-adjusted value of the endowment in perpetuity.

Grant allocations for any given year will differ from the total grants approved and total grants paid during that year. In 2009, the board of directors approved 833 grants totaling $50.2 million, some of which will be paid in future years. Also, $61.7 million was paid on 1,979 grants, some of which were approved in prior years.

IIn addition to its regular grantmaking program, Houston Endowment matches, on a two-for-one basis, personal gifts made to charitable organizations by the foundation’s directors and staff. In 2009, $322,790 in grants was paid under the matching gift program. Under a directed grant program that allows directors and other program participants designated by the board to designate up to $50,000 each in grants to charitable organizations of their choosing, $445,000 in grants was paid in 2009.

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