Dear Friends:
Our second year was a challenging one. We started the year with great plans to build on our first-year successes in lobbying and funding just as the U.S. stock market began a long, significant downturn. Despite that harsh economic reality, the Kirsch Foundation:

• Developed a reputation as a consistent and socially progressive voice in national and California public policy discussions and debates.
  
• Created a new medical science research funding model.
  
• Strengthened our knowledge of and commitment to nuclear disarmament and political reform issues and organizations.
  
• Maintained a strong grants program in Silicon Valley.
  

Strategy and Progress
In December 2000, the Board approved a strategic plan to guide our efforts over the coming years. The goals, which tower in scope, address our concerns for the planet, the environment and all species, especially humankind:

• Ensure world safety
  
• Restore the world’s environment to an unpolluted state
  
• Eliminate all diseases
  
• Make our community a model of a safe, healthy, and enriching environment for all residents
  

While some may consider us audacious, even naïve, for the extraordinary breadth of these goals, we would rather aim high than settle for less.

Economic Overview
At the beginning of July 2000, our endowment was $75 million. A year later, after grants, grant payments and operating expenses of $10 million, the endowment had shrunk to $35 million. Because there are diseases we want to cure, air quality that we want to improve, peace that we want to secure, and a community we want to help, we decided not to reduce our budget during the year, even as the asset base declined.

Our investment policy is an aggressive one, based on our belief in the long-term importance and vitality of the technology sector. Our budgeting – for operations and grants – is equally aggressive. As necessary, we will continue a high expense-to-asset percentage rate during the coming years. We would rather do what we can today in order to speed progress toward solutions than build a certain financial future for the Foundation itself.

Our Thanks
We want to acknowledge four groups of people whose contributions greatly strengthen the Foundation. We are grateful for all they do.

• Perry Olson and Harry Saal, the independent Directors on the Board, support the Foundation’s vision and insure clarity and congruence as we proceed.
  
• Our Scientific Advisory Board members lend their expertise to assess and select promising medical researchers.
  
• The Community Foundation Silicon Valley Board and staff, especially its CEO, Peter deCourcy Hero, encourage philanthropy among a new type of donor, including our Foundation.
  
• The talented and dedicated staff at the Foundation lives and breathes the vision and mission on a daily basis and brings us closer to our goals.
  

Finally, in light of the political and economic turmoil of this past year, we believe all efforts to help make the world safer and healthier are critical. We hope you join us in this work.

Steven T. Kirsch Founder and Board Chairman

Michèle Kirsch Founder

Kathleen Gwynn President & CEO