In our short history, we have blazed a unique trail in the world of philanthropy. While we have tremendous respect for those who went before us and those who work with insight and dedication in the field today, we have been developing our own path because we have been given the opportunity. Other foundations have restrictions with regard to engaging in lobbying and advocacy that we do not face. IRS regulations for private foundations force them to severely limit their engagement in public policy. And community foundations, with donors from all points of view on the political spectrum, usually find it prudent to remain neutral on controversial policy issues.

At the Kirsch Foundation, due to our supporting organization status, we have the freedom to pursue lobbying and grantmaking in tandem. Since we are small in asset size - about $8 million at the end of June 2005 - and we address big issues such as nuclear disarmament and clean air in California, we must creatively use all available tools in order to have an impact. This forces us to explore and then exploit synergies and take risks.

In this report, we highlight the two major topics in which we are engaged both in grantmaking and public policy lobbying and advocacy: 1) San Joaquin Valley air pollution and its air quality advocacy community and, 2) the peace and security community. While we acknowledge our contributions to these causes, our focus on each community is deliberate. We recognize that we can accomplish our goals most effectively through collaboration with other foundations, nonprofit organizations, and committed individuals. We commend our staff, Susan, May and Connie, for their commitment to working in partnership with others and letting our colleagues receive the credit for the work that gets done.

During the past year, we faced some tough choices due to our reduced assets. We determined that our main priorities must remain reducing the threats from nuclear weapons and cleaning up California's air. After painful deliberation, we eliminated our financial commitments to campaign finance reform, global warming, medical research and Near Earth Objects detection. We also restricted our engagement in lobbying for an expanded stem cell research policy at the federal level. These decisions enabled us to reduce our budget from $2.75 million to $1.5 million annually. By doing so, we extended our organizational life by several years. We greatly appreciated the insights and support of our Board members, Perry Olson and Bill Johnson, as well as the continuing commitment of Community Foundation Silicon Valley, as we discussed and implemented these changes.

If there is one thing that we have learned over the past six years, it is that forging a path can take us in surprising directions. We have been through expansion and contraction; we have identified new issues and become more skilled in knowing where we can make a measurable contribution. Through the twists and turns, however, we have held fast to our beliefs: The world would be safer without a nuclear threat; all of us deserve to breathe clean air; and scientists should have the ability to conduct advanced medical research. Regardless of where this unfolding philanthropic path leads us, we will forge ahead, enjoy the journey, and try to leave a trail worthy for others to follow.

Sincerely,