The 2008 fiscal year—ended June 30—was a strong year for our foundation by any measure. Our total grants were $9.1 million, and we finished the year with a solid $172.9 million of net assets. With the assistance of an outstanding professional staff, our grantmaking has become a bit more focused within the parameters we have set for our four primary areas of interest. We are looking to build capacity in each of those areas of interest. We are looking to support organizations that are willing to engage in rigorous self-assessment. We are trying to encourage the measurement of outcomes wherever we can identify what our board member Stephanie Pace Marshall has described as "metrics that matter."

We have a growing interest in the problem of climate change, and our focus in this area has been (and will continue to be) on understanding the problem, measuring our impact on the problem, reducing that impact, and mitigating the effects of the problem—particularly the effects on the lowest-income people of the urban Chicago community that we serve. We have devoted a modest portion of our assets to world relief, and we will likely continue to do so.

At this writing, however, we find ourselves struggling with the global economic crisis and its implications for our foundation. Despite a defensive and highly diversified approach to the management of our portfolio, our asset values have dropped dramatically. We do not know whether we are now looking at the bottom of the market or into a pit of more bad news. We are seriously apprehensive, and we are in good company. Drew Gilpin Faust (the president of Harvard) recently wrote to the faculty, students and staff of her university on this very topic, noting that our economic landscape has been altered. Our foundation and Harvard are both of necessity planning for a period of financial constraint.

While we are anxious about the downturn that we face, we are resolute in our commitment to those organizations described in our mission statement "with the strength and commitment to address persistent problems of urban Chicago resulting from poverty, violence, ignorance, and despair." We will not let the press of the economic downturn cause us to turn our backs on those organizations and the wonderful people who run them. We consistently have distributed more than the tax law has required in past years; we will continue to do so.

We are optimistic about the future of our foundation, our community and our nation. While we suffer from a relative scarcity of resources, we have great energy and appetite for the work before us. Our foundation staff has never been stronger; our board has never been more committed to our mission. We have added a terrific new member to our board, Graham Grady, who has insight and enthusiasm for our tasks. We are fostering a number of partnerships designed to strengthen our grantmaking. We will persevere.

Howard M. McCue III, Chairman