Hello!

Welcome to the third year of The Lawrence Foundation. This was a year of continued grant making.

We received and reviewed 100's of grant requests and letters of inquiry. This was a moderate increase over 2001.

We continue to distinguish between what we label as regular and special grants. The regular grants are those that reflect the interests of the trustees. The special grants reflect the interests of the trustee's parents and are being made only one time (although they may be paid out over the course of a few years). We have almost completed making our commitments for the special grants and future grantmaking should consist only of regular grants.

A total of 15 new regular grants and 6 new special grant commitments were made this year, to a mix of large and small organizations. We've almost finished up making our remaining special grant commitments and continued paying off the special grant commitments we made in previous years. When our special grant commitments are paid off by 2007 they will total in aggregate $2 million.

New regular grants this year ranged in size from $500 to $10,000. The total dollar value of the regular grants was less than last year. This is reflective of the decrease in the asset value of the foundation in what was a tough year for everybody. The total Grants tended to be allocated to general uses for the larger organizations and project oriented uses for the smaller organizations. We continued to find ourselves making grants to a number of environmental causes and to a lesser extent for education and some other causes.

The asset value of the foundation continued to decrease this year as a result of the bear equity market and our concentrated position in a single stock that was used to initially fund the foundation. We are now on our way to diversifying out of the concentrated position and should be fully diversified by the end of 2003. The foundation started the year with an asset value of about $5 million and ended the year ended with an asset value of about $3.2 million.

Although we have two grant cycles we have found that as a matter of convenience we tend to make most of the grants in the second cycle of the year. We are striving to balance our grant making between the two grant cycles. We are also finding the grant requests and letters of inquiry that we have been receiving are pretty thorough and as a result we haven't had to ask for as many full proposals as we thought we would have to.

The Web site continued to be very active this year. We changed our address and phone number towards the end of the year. In reflection of her increasing responsibility we promoted Lori Mitchell from Administrator to Executive Director.

We expect that during 2003 we will continue to develop our grant making themes and points of view. We have not converged on specific themes as quickly as we thought we would. There are so many worthy causes that need help. We are also starting to think about ways we can have a greater impact beyond just making grants. We recently came across some interesting perspectives about grant making in a Harvard Business Review article from 1999 entitled "Philanthropy's New Agenda: Creating Value".

Respectfully Submitted,

Jeff Lawrence and Diane Troth
Trustees

Lori Mitchell
Executive Director

The Lawrence Foundation