From the Executive Director --Ellis F. Bullock This FY02 Annual Report is dedicated to the memory of Grotto Foundation Founder Louis W. Hill, Jr., who would have celebrated his 100th birthday on May 19, 2002. Louis W. Hill, Jr. Recognition In recognition of this anniversary, the Board of Directors announced the creation of the Louis W. Hill, Jr. Fellowship for Philanthropy. The fellowship -- which commits $1,000,000 over five years -- represents a collaboration between the Grotto Foundation and the Northwest Area Foundation. The Northwest Area Foundation was created by Mr. Hill's parents, and Mr. Hill played a significant role in its organization. The fellowship will be administered by the University of Minnesota's Hubert H. Humphrey Institute of Public Affairs. Each year, the Hill Fellowship will include a $100,000 award to the Fellow and $100,000 for administration of the program. The Fellow will work with the Humphrey faculty to research, plan, and deliver a public lecture and symposium addressing issues of philanthropy, public affairs, and public policy. The beneficiaries of the lecture and subsequent symposium will be the Institute's students and the community who are eager to learn from, and have dialogue with, a long-time leader in the work of philanthropy and community service. In May, the Grotto Foundation Board hosted a special birthday celebration at the historic James J. Hill Mansion, at which time the fellowship was announced. Grantmaking in 2002 In establishing the Grotto Foundation, Mr. Hill expressed his commitment to the foundation's support of community-based nonprofit organizations, and specified that a portion of the foundation's grantmaking should be focused on supporting Native-American projects. Continuing to respond to his wishes, the Grotto Foundation contributed and/or committed $777,015 in grants for FY02, compared to $1,006,256 for FY01. This year's reduction in dollars granted is related to the declining market and extraordinary expenses. "General Grants" totaling $471,270 were awarded and/or committed to organizations and agencies that work to address Grotto's primary interests of "Community, Family and Understanding." In addition, $305,745 was granted to organizations, institutions, and communities that are striving to revitalize the use of Native-American language in concert with Grotto's Native Language Revitalization Initiative. Native Language Revitalization Initiative Extensive research in Native language revitalization led to the creation of the Grotto Foundation's major initiative in 2001. Having recognized the importance and benefits of heritage language mastery among young and adult learners, the Grotto Foundation committed 5.6 million dollars over fifteen years for Native language revitalization efforts. With the guidance of a newly appointed Program Officer for the Native Language Revitalization Program, the Grotto Foundation seeks to serve as a catalyst in the Native language revitalization movement. Over the course of the year, several grants were made to promising Ojibwe and Dakota language programs throughout Minnesota, Wisconsin, and South Dakota. Strategies for grantmaking were reviewed and refined, grant guidelines were developed, and grantseekers were provided with extensive technical assistance. Grotto grants were made to an Ojibwe language K-3 immersion school, and to a tribal-community college teacher education program, which features the first Ojibwe language minor in Minnesota and a Master-Apprentice (one-to-one training) program for a community leader. American Indian Family Empowerment Program (AIFEP) The Grotto Foundation completed its second year of collaboration with the Marbrook Foundation in the operation of the American Indian Family Empowerment Program (AIFEP). The foundation committed more than $46,000 in staff and in-kind services to assure that American-Indian families could receive financial assistance for education, business development, home improvement, and cultural revitalization. This unique program awards $80,000 annually in small grants (averaging $1,500 to $2,500) to individuals and families who are aspiring to achieve personal goals or to enhance their home or cultural environment. Marbrook provides the grant dollars and Grotto provides the operating staff and infrastructure to support a community advisory committee that reviews the applications and decides on allocations. The Minneapolis Foundation continues to be an integral part of this collaboration, providing the financial management and distribution component not available to private foundations. A commitment to program evaluation was made this year, and the results will be used to guide the future direction of AIFEP. Other Grotto Collaborations Two other collaborations figured prominently in Grotto outreach during FY02. Grotto staff assumed an active role in the Midwest Funders' Collaborative for Hispanics in Philanthropy, which focused on building the capacity of Hispanic/Latino community-based organizations and agencies throughout the state. Additionally, Grotto staff worked with the Wilder Foundation's New American Collaborative, which focused on support and capacity-building for the rapidly increasing number of agencies established to meet the needs of refugee and immigrant populations relocating to Minnesota. Grotto Evaluation Effort With an emphasis on learning, for both grantmaker and grantee, the Grotto Foundation is committed to an ongoing evaluation process. Reflection and assessment along the path of continuous improvement in our communities are useful processes. They help foundations and organizations learn and relearn how best to make community change. The tools of process evaluation are of value to Grotto as it advances its understanding of the needs of the community. The Grotto Foundation staff has been working toward creating an evaluation program that balances the use of quantitative and qualitative data. The process allows for anecdote, case study, statistics, and feedback. It helps connect the day-to-day process with the outcomes, goals, and dreams that are set forth. Since Grotto works with many organizations that are in their formative years, reflection in the form of evaluation assists in finding best practices and models that keep the outcomes in sight of the day-to-day work. It also provides the foundation and the grantee organizations information on what is working and what is not, as well as valuable feedback on which action may be taken. In Summary FY02 was a year of administrative transition, increased collaborations, and enhanced evaluation amid economic uncertainty. In FY03, the Board and Staff are committed to improved services, and increased technical assistance to our grantseeking community. As we have asked of our partners, we will seek to learn how well we are accomplishing our goals and what we may need to do to improve on our efforts.