Hello!

Welcome to the seventh year of The Lawrence Foundation.

We received and reviewed 443 grant requests and letters of inquiry this year and made 36 grants. The 443 grant requests we received in 2007 represent a 29% decrease over the 628 grant requests that we received in 2006. The distribution of the grant requests was 25% human services, 29% environment, 29% education, 8% health and 9% other in 2007. We were able to make 36 grants with a value of $173,415 to a mix of large and small organizations. Of the 36 grants made in 2007, 24 or 67% were made to environmental causes, 5 or 14% were made to human services causes, 3 or 8% were made to health causes and the rest were made to other causes. Historically, we haven’t made many multi-year grants, although we are finding that as we develop relationships with non-profits we are making grants to the same non-profits over many years. Of the 36 grants made in 2007, 17 with a total value of $111,915 were made to non-profits that had received grants from us in previous years. Of the 19 grants made to “new” non-profits (i.e. non-profits we had not made grants to before) in 2007, 10 or 53% were made to environmental causes, 4 or 21% were made to human services causes, 2 or 11% were made to health causes and the rest were made to other causes.

For each 15 or so grant applications that we received we were able to make 1 grant. The grant making pendulum has swung to emphasize environmental issues, but we'd still like it to swing back slightly to include other issues as well. Regular grants this year ranged in size from $1,000 to $10,000 with a typical size of $5,000. We have no geographic restrictions in our grant making. Since the foundation's inception we've made commitments and grants totaling over $2.9 million.

The asset value of the foundation increased about 4% this year. The foundation started the year with an asset value of about $5.1 million and ended the year ended with an asset value of about $5.3 million. The foundation's assets increased in value because of a strong equity market but this was countered by a decrease in assets because of the continued pay off of the special and regular grants. We finished paying off the special grants (described in earlier year's annual letters) in 2007. This should allow us to increase our regular grants in the future. Our primary investment objective remained unchanged and is to target a real rate of return of 4.5+% (net of investment expenses) with a conservative to moderate risk tolerance and a 10+ year time horizon. Our assets are currently allocated between U.S. equities and international equities (61.1%), fixed income securities (14.6%), alternative investments (24.3%) and cash and cash equivalents (0%).

Our new grant making budget for 2008 has been set and we look forward to the coming year. We are continuing to make more operating grants.

The foundation sponsored, organized and hosted, in association with the Natural Resources Defense Council (NRDC) and the Global Development and Environment Institute (GDAE) at Tufts University a workshop for environmental economics in March of 2005. The vision for the workshop was to identify, develop and engage a network of economic experts and others that share and support a common vision of developing, delivering and advocating credible and effective economic theories and arguments for environmental protection, stewardship, and investment. The Center for the Applied Study of Economics and Environment (CASE&E), which is now known as E3 (www.e3network.org), was formed as a result of this workshop. The foundation sponsored and hosted a follow-up workshop in March of 2007 to continue the discussion and development of CASE&E, a network of economists whose work supports an active agenda of climate mitigation and environmental protection in general.

Throughout the year we have received a number of visits from grant seekers at our office in Santa Monica. We've enjoyed all of the visits and appreciated the time they've all spent educating us on their issues of importance.

We completely moved over to our self developed online grant application at the end of 2006. As mentioned in previous letters, we provided the software that we developed for our online grant application to another entity (www.commongrantapplication.com) to develop a more complete and full featured common grant application. We completely moved over to the Common Grant Application at the end of 2007. It appears it will be an excellent mechanism for us to manage our grant application and reporting process.

It is clear that the challenges the world faces are not going away. We hope that our activities, in some small way, will make the world a better place for future generations.

Respectfully Submitted,

Jeff Lawrence and Diane Troth
Trustees

Lori Mitchell
Executive Director

The Lawrence Foundation