2002 ANNUAL REPORT MISSION AND VISION As most of you read this letter, the Rockefeller Foundation will have celebrated its 90th birthday. In 1913 the challenges of poverty and inequality were pressing and visible, as they are now. Ron Chernow writes in "Titan," a biography of John D. Rockefeller, that New York City in the early 20th century was a place where the poor were sick, badly housed and poorly fed. Today urban and rural poverty persists in the United States. Yet poverty is most acute in the developing countries where more than one billion people live on less than one U.S. dollar per day. Given the social challenges 90 years ago, our founder could have decided to give away his wealth rapidly, arguing that the world needed his money then rather than at some future date. Wisely, he anticipated that by setting up an endowment money would be available in the future for unforeseen problems. Mr. Rockefeller gave us a broad mandate to further the "well-being of mankind throughout the world." He didn't want the Foundation to be a charity-- dispensing coins into begging bowls or responding to disasters--but would rather uncover root causes of problems and find their solutions. This past year we have become more analytical in our grantmaking approach. We've narrowed the grantmaking focus to about 20 well-defined areas of work. Each of these is subject to "problématique analysis," which is a way of defining a problem taking into account the economic, political and policy context of the issue. Of course we are not the big player today that our money allowed us to be 90 years ago. While the current $2.6 billion value of our endowment is close in real purchasing power to the original endowment's value, the world's problems are bigger today. No one organization can work in isolation. Instead we work with and through others. We may fund technological innovation, or help build institutions or human capacities in critical areas of expertise. Or we may have our most far-reaching effect by helping to set a public agenda. No one sector has a monopoly on solutions to human welfare or the wherewithal to produce and implement them. The Foundation's experience has shown that partnerships work. A critical step in the problématique analysis is to identify who is working in similar ways, where is our comparative advantage and where the potential for partnership lies. Eleven years ago we were pivotal in setting up a donor consortium to aid the revitalization of U.S. cities. We've shown that by helping to strengthen urban community-development corporations we enable them to access billions of dollars in grants and loans for housing and commercial development. © 2003 The Rockefeller Foundation In 2002 we played a key role in launching the consortium's second decade renamed "Living Cities: National Community Development Initiative." The partnership has expanded to include eight foundations, seven financial institutions, and the U.S. Departments of Housing and Urban Development (HUD) and Health and Human Services' Office of Community Services (OCS). We have expanded our remit to take on policy research and new experimental approaches. To date, we've raised $120 million. A second, very different partnership launched in 2002 is the International Partnership for Microbicides. Research and development of microbicides designed to control the spread of HIV are critical to slowing the AIDS pandemic. Microbicides arecompounds that when formulated as foams or gels can be used by women to protect themselves from sexually transmitted diseases during intercourse. To date large pharmaceutical companies have made limited investment in research and development of microcibides that can slow the spread of HIV. Our hope is that this new partnership that focuses on the innovative capacities of small biotechnology companies will produce one or more effective products. So far, eight other donors have joined us. The Foundation's success in creating such partnerships comes in part from the skills and experience of our staff, but also builds on the Foundation's reputation and our accumulated knowledge of the world and how it can be changed for the better. The year 2013, the Foundation's centennial, is close to the date fixed for the Millennium Development Goals of the United Nations. Reaching the goals-- among them halving poverty and hunger and reducing infant mortality by two thirds--require the resources of the global community. Yet this Foundation plays a vital role by funding demonstration research or by bringing together key actors who are able to implement solutions. In 10 years, when this Foundation turns 100, I'm confident that John D. Rockefeller's vision of making the world a better place will continue to be both a rallying cry as well as a statement of achievement. Gordon Conway April 2003 2002 President's Letter © 2003 The Rockefeller Foundation ABOUT THE FOUNDATION: PROGRAM GOALS The Rockefeller Foundation is a knowledge-based global foundation with a commitment to enrich and sustain the lives and livelihoods of poor and excluded people throughout the world. In order to maximize its resources and leverage the Foundation's strengths, grantmaking is organized around four thematic lines of work: Creativity & Culture, Food Security, Health Equity and Working Communities. A cross-theme of Global Inclusion supports, promotes and supplements the work of these themes. In addition, the Foundation supports various regional and special programs, among them the Africa Regional Program, Southeast Asia Regional Program, Communication for Social Change, Public/Private Partnerships and Global Philanthropy. We also offer a unique place for study and creative endeavor through our Bellagio Study and Conference Center in northern Italy. The Foundation's strategic direction focuses explicitly on the challenges faced by poor and excluded people and affirms our assumptions about development, most notably that: • For the Foundation's strategies to be most effective, poor and excluded people should have a voice in the process, we should actively find ways to unleash those voices, and such voices should be heeded; that • The poor and excluded people themselves should participate in researching, planning and doing the work; and that • We must seek creative ways to leverage our limited dollars in order to attract new funding from the private sector, international aid organizations, and national, state and provincial governments. The challenges confronting poor and excluded people are too numerous, complex and massive to be addressed by any single foundation alone. A $15 million grant, or even a $50 million grant, cannot begin to address a cure for AIDS or development of new tuberculosis drugs, for example. We must continue to emphasize the creation and support of global partnerships, alliances and collaboratives to effect positive change in the daily lives of poor people. The Foundation will continue to join forces with governments, industry, other foundations and nongovernmental organizations to ensure that poor people are included in decisions that affect their lives. © 2003 The Rockefeller Foundation THE PROGRAMS: CREATIVITY & CULTURE Goal: To give full expression to the creative impulses of individuals and communities in order to enhance the well-being of societies and better equip them to interact in a globalized world. Culture and artistic expression serve as barometers of the quality of people's lives and provide agency for improving them. Cultural workers--ranging from humanities scholars to traditional African griots to digital artists and media producers--serve as catalysts for comprehending, articulating and addressing the needs and aspirations of individuals and communities. They and their institutions express their communities' dissent, preserve its memory, generate dialogue and provide critical commentary about a rapidly changing world. Cultural workers and artists are vital to community resiliency, as they help people withstand and respond to the stresses of poverty, migration, violence and discrimination. Globalization and the increased cultural interaction it spawns can be both threatening and enriching. The steady encroachment of Western popular culture does, for example, have a homogenizing effect that undermines many traditional cultures. But at the same time new technologies have offered innovative avenues for expression, giving life to altogether new "imagined communities" that unite people through shared experiences. And in this increasingly borderless world, the dynamics of immigration and emigration are testing communities' cultural resiliency while the artists and humanists who both reflect and lead these transformations are themselves navigating in an environment in which the nature and definition of the arts is changing. Technology has not only extended, but blurred the boundaries of art making as both visual and performing artists explore its possibilities. As it has throughout most of its history, the Rockefeller Foundation bases its support for the arts and humanities on the conviction that societies are enriched by the free expression of creative individuals. To address the challenges posed by globalization, the Foundation aims to enhance the creativity of individuals and communities through the preservation and renewal of the cultural heritage of poor and excluded people, the engagement of artists and humanists in the creation of democratic and inclusive societies, and the support of diverse creative expression and experiments with the new digital