With new leaders in place, Rasmuson Foundation pauses grants during reset

The Rasmuson Foundation, Alaska’s largest private charitable funder and a juggernaut in the state’s philanthropic ecosystem, is taking a break from giving out money.

“It’s kind of a ‘small p’ pause,” said Gretchen Guess, who was named president and CEO of the foundation earlier this year.

In August, the Rasmuson Foundation announced that amid a “once-in-a-generation transition in leadership,” they would be pausing their grantmaking. A range of programs, including capital grants, support for artists, and funded sabbaticals for nonprofit leaders are going on hold until the middle of 2024.

The move comes at a time when many of the nonprofits, local governments, tribes and community groups that rely on philanthropy and charitable giving are facing difficult economic conditions. Nationwide, charitable giving fell in 2022, and high inflation has eaten into budgets as pandemic-era federal relief programs are winding down.

So far this year, the foundation has given out more than $35 million in grants, funding a wide range of causes all over the state. Given the large footprint the Rasmuson Foundation has in Alaska, news of the pause raised considerable interest about what it could mean for groups all around the state.

“Nobody is in a panic yet,” said Ira Perman, who directs the Atwood Foundation, another charitable funder that has a small degree of overlap with Rasmuson in the causes it supports.

Perman said that after the pause was announced, some grantees got in touch with his organization wondering if the Atwood Foundation might be able to fund projects they would normally go to Rasmuson for. But among private foundations in Alaska, the Rasmuson Foundation is in a league of its own in terms of the size of its annual giving and breadth of projects.

‘We’ve grown really fast’

Leaders of the Rasmuson Foundation say they decided to temporarily halt grants to shore up their internal systems at a time when there have been significant changes at the top.

“What we really hope to do during this time is just to recalibrate. We’ve grown really fast,” Guess said during an interview in the foundation’s sixth-floor office in Midtown Anchorage. “When you grow fast, your operations sometimes don’t keep up. And you have to just kind of go in and smooth things out.”

Two of the people who shaped much of the foundation’s growth in recent decades are no longer there. In 2022, longtime board chairman Ed Rasmuson passed away. Ed Rasmuson was the son of Elmer Rasmuson, who co-founded the foundation with his mother Jenny. Also in 2022, CEO Diane Kaplan announced her plans to depart after 27 years at the organization, during which time its assets grew from around $5.8 million to $730 million at the end of 2022. This month, Kaplan was named a senior fellow at the Indiana University Lilly Family School of Philanthropy.

The chairman of the foundation’s board, Adam Gibbons, took over from his uncle in 2021. He said it had been roughly 20 years since the board had had a strategic discussion about the organization’s mission and future, and the tenure of a new chief executive officer was an opportunity to reexamine their core principles.

“We live by this north star of my grandfather, Elmer: Helping others is an Alaska tradition. What does that mean? How do we effectuate that? How do we operate?” Gibbons said.

He added that the foundation will remain focused locally, with no substantial shift anticipated toward priorities in the Lower 48, and a “high-touch” style of engaging with grant recipients.

“I don’t see us changing in any dramatic way how we do our work, or even the interest areas,” Gibbons said. “We’re going to be supporting Alaskans, from Utqiagvik to Ketchikan and everywhere in between.”

The pause in grantmaking is not because of poor financial performance or a significant drop in the foundation’s endowment, Gibbons said.

“Did we peak, like every other endowment, at December of 2021? Yes. But we’ve had a fine year in the markets,” he said.

One change that’s on the horizon for the organization, Guess said, is an expanded focus on homelessness, which the foundation began spending millions of dollars to address in the Municipality of Anchorage under an initiative that started at the end of 2018.

“People will see us more in the statewide homeless space. We went to over a dozen communities this summer. And I had over 100 conversations with different folks around the state. Everyone is having issues with homelessness. It looks different, depending on which community you’re in. So, meeting those communities where they’re at, seeing what they need,” Guess said. “That work will continue, and is really needed within the state, to understand that it’s not just an Anchorage issue.”

Guess and Gibbons stressed that while its regular grantmaking is suspended for the next several months, the organization is committed to maintaining communications and relationships.

“Hopefully this pause is (just) a blip in a timeline, and when we emerge we’re just doing our work a lot better, a lot more efficiently. And nobody will remember,” Gibbons said.

‘Doing more with less’

After the Rasmuson Foundation announced it would cease accepting grant applications at the end of August and through mid-2024, its program officers received an “unprecedented” volume of applications for its Tier 1 program, which funds smaller requests under $25,000 for capital expenses like technology upgrades, equipment and vehicles.

“We received 145 applicants, just at the end of August,” Guess said. “It was like it was raining Tier 1s.”

In addition to local governments and tribes, many of the foundation’s grant recipients are nonprofit organizations, which represent a significant portion of Alaska’s economy and are currently dealing with tough financial conditions.

An economic impact study released at the end of 2021 by the Foraker Group, an organization that provides services to Alaska nonprofits, assessed the sector as 13% of the state’s total workforce, with an outsized role in many rural communities where private-sector jobs are scarce to nonexistent.

The COVID-19 pandemic upended the ways nonprofits do business, both in how they deliver services and how they get money. In 2022, charitable giving by individuals, foundations and corporations fell by 3.4%, according to Giving USA, an annual report on philanthropy from the Lilly Family School of Philanthropy. That report noted only three other years in four decades of analysis where there was a year-over-year decline. The drop in charitable giving is being exacerbated by high inflation and a tight labor market that are making salaries in the nonprofit sector worth less than they were just a few years ago.

“About half of Alaska’s nonprofits are bracing for decreased support from various sources,” according to the Foraker study. “At the same time, demand for services and the cost of doing business is increasing. Nonprofits are losing staff through the Great Resignation and volunteers from COVID concerns. It’s clear that stress is taking a toll on those we serve and those in service.”

“We essentially have groups doing more with less,” said Laurie Wolf, Foraker’s president, speaking of nonprofits across Alaska.

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Wolf said that throughout the economic precarity that began in 2020, much of the sector got by on federal pandemic relief dollars. But those programs are waning, and organizations are trying to adapt to a changed fiscal landscape. Meanwhile, as many of those same government support programs dry up, demands from individuals and families with diminishing options are growing on nonprofits like food banks, community clinics, and housing assistance programs for help.

“Our health and human service organizations experienced a doubling if not tripling in demand for their services while simultaneously losing their on-the-ground volunteers during the pandemic, and experiencing a shift in philanthropic dollars,” Wolf said.

Addressing those needs is bigger than any one private foundation, she said, even one as sizable as the Rasmuson Foundation is in Alaska. Many of the needs are connected to a decline in state funding for services and large-scale capital programs. According to Wolf, a major philanthropic foundation taking a short-term break from charitable giving is not out of the ordinary or significant cause for alarm.

“I do believe it’s a pause and not a stop,” Wolf said. “It’s healthy, it’s normal, it’s expected. We see it from lots of other foundations around the country and around Alaska.”

Clarification: This article has been updated to note that Elmer Rasmuson cofounded the Rasmuson Foundation with his mother Jenny.