During 2006 the value of Houston Endowment’s investments increased from $1.512 to $1.626 billion. The $114 million increase was the net effect of $95 million in grant payments and expenses offsetting $209 million in income and market appreciation. Total investment return (income plus capital appreciation), after investment fees, for the year was 13.7 percent. The average annual compound return for the past five years, net of fees, was 9.3 percent; and for the past 10 years it was 9.1 percent.

Houston Endowment has a long-term asset allocation target for its investments of
75 percent equity and 25 percent fixed income. At year-end, the foundation’s endowment was invested as follows:

Grant Spending

In 2006 Houston Endowment’s allocation for grants was $79.6 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 2006 the board of directors approved 591 grants totaling $79.5 million, some of which will be paid in future years. Also, $83.4 million was paid on 883 grants, some of which were approved in prior years.

In addition to its regular grantmaking program, Houston Endowment matches, on a two-for-one basis, personal gifts made to nonprofit organizations by the foundation’s directors and staff. In 2006 $242,813 in grants was paid under the matching gift program. Under a director-initiated grant program that allows directors to designate up to $30,000 each in grants to charitable organizations of their choosing, $240,000 in grants was paid in 2006.

Click here to view the 2006 Audited Financial Statements in pdf format (92k).