GRAFTON—The Windham Foundation is organized as an operating foundation under the federal tax code, which declares that it spend at least 85 percent of its adjusted income — or its minimum investment return, whichever is less — directly for the active conduct of its exempt activities.
Other kinds of foundations — corporate, private, independent, and community — live by other rules.
The Windham Foundation’s designation as an operating foundation means that the 48-year-old historic preservation, land management, and grant-making entity in Grafton is required to spend most of its income on its own operations.
It accomplishes this task, according to the foundation’s 2009 annual report (covering the period Nov. 1, 2008 to Oct. 31, 2009), “by owning and operating The Old Tavern at Grafton, the Grafton Village Cheese Co., the [Brattleboro] Retreat Farm, and about [2,000] acres of managed forest and woodland.”
And that’s more or less what it continues to do, besides giving away money annually to Vermont towns, Vermont projects, and a variety of artistic and education-oriented organizations.
Meanwhile, its sister organization, the Bunbury Company, a private foundation in New Jersey, gives substantial amounts to the Windham Foundation ($282,000 in 2009), specifically for grant-making purposes.
Both organizations were founded by Dean Mathey, a wealthy New Jersey resident who used to spend part of his summers in Grafton.
More recently formed is the Grafton Fund, established by the foundation to serve specific purposes, apart from the grants program.
The fund does not provide grants for ongoing nonprofit programs and services, or for an entity’s operational or capital needs. Instead, the fund is limited to Grafton activities, special programs, social, recreational, and cultural programs, and one-time events or projects. The grants are generally limited to $2,000 or $3,000.
The fund is supported through donations and an annual grant from the Windham Foundation.
Taking into account these three granting entities, as well other programs and events, the charitable expenses of and donations to Windham Foundation programs came to $474,895 in fiscal 2009, $547,302 in fiscal 2008, and $541,549 in fiscal 2007.
These figures include grants, scholarships, lectures, other special events, the Grafton Fund, and the Bunbury grant.
The drop of more than $72,000 between 2008 and 2009 reflects investment losses experienced after the steep decline in the stock market, affecting the total wealth of most nonprofits.
John Bramley, the outgoing president and CEO of the foundation, said that the recession and its consequences cost the foundation about $10 million, reducing its value approximately 23 percent, from about $65 million to about $50 million.
This amount is below what a January 2009 survey of large foundations in the Chronicle of Philanthropy reports: “For the 57 grant makers that provided financial data for 2007 and 2008, endowments declined a median of 29 percent.”
Despite the losses, he money these large foundations, as well as the Windham Foundation and its grant-making affiliates, give away has barely diminished.
Meanwhile, compensation paid to Windham Foundation officers and other highly paid employees (the tax form designation) increased substantially.
For the tax year beginning Nov. 1, 2008, and ending Oct. 31, 2009, compensation for four of the officers of the foundation, including the president and three other “highly paid employees,” according to the tax form, was $568,606.
Compensation for other officers, directors, and trustees, apart from the president, amounted to $367,818.
Neither of the totals reflects the benefits that were paid for each employee.
For the tax year beginning Nov 1, 2007, and ending Oct. 31, 2008, the total for all officers, including the incoming president (Bramley) and the outgoing president (Stephan A. Morse), amounted to $573,886. Again, benefit amounts are not included.
This information was gleaned from IRS Form 990, the document that all nonprofits must submit annually. The information is in the public domain and can be accessed on the Internet.
Bramley said that none of the compensation paid seems unusual to him.
“You can’t just look at the 990s,” he asserts. “You have to look at what we’ve done. The Windham Foundation has created jobs; we’ve given 120 employees health care benefits.
“And, because of the Windham Foundation,” he said, “half a million people have come to Grafton.”