Ballet dancers and drug addicts. Public radio listeners and dinosaur diggers. Cancer researchers, latchkey children and battered women.

They're all in the same boat, riding the same current -- and waiting for the coming storm.

A rising tide of philanthropic giving over the past three decades has lifted many. But recent economic woes have devastated endowments that have become a vital source of funding for programs that nurture human needs and nourish human spirits.

Utah's charitable foundations have used endowment earnings to inject about $130 million a year into programs that touch the lives of nearly everyone in the state. But next year that money could be cut in half.

Now, those who rely on foundation support are bracing for a squall.

The system collapses

In good times, it's a good system.

The financially blessed put some of their riches into a foundation, which in turn invests in the stock market.

Twenty million dollars, perhaps. Figure a conservative return of 5 percent a year. That's $1 million that can be turned out for homeless shelters and church buildings, symphonies and food banks, environmental preservation and animal rescue -- all without ever touching the principal.

One million dollars a year. In perpetuity.

That's how it has worked for more than 100 years in America. And that's why many Americans still recognize the names of turn-of-the-century industrialists like Charles Stewart Mott, John D. Rockefeller and Andrew Carnegie. Those men began their foundations with hundreds of thousands of dollars. In the intervening years, they've given away hundreds of millions. Today, their endowments are worth billions each.

When Carnegie began his foundation in 1911 there were less than 20 such enterprises in the country. Today, there are tens of thousands.

Utah's 450 foundations collectively carry assets worth upward of $2 billion. At least, that's what they were worth in 2007. An army of accountants, tax attorneys and estate specialists is still trying to make sense of what the market wrought in 2008.

But one thing is certain: There will be tens of millions of dollars less to distribute in coming years.

Warily watching Wall Street

The Guadalupe School was founded in 1966 as a small community center for Latino families on Salt Lake City's west side. Today it is a major learning hub catering to thousands of at-risk children and adults.

Driving that growth were the checks that came, year after year, from foundations whose monies were invested in a market that saw far more ups than downs. Nationwide, grantmaking slumped in just three of the past 30 years -- and in each instance it was by less than half a percent. In most other years, giving increased by double-digit percentages. That made foundations the closest thing to a sure bet in the non-profit world.

Guadalupe relies on foundation grants for about a third of its operating budget -- providing almost to the dollar the cost of its 112-student preschool. So although Guadalupe development director Angie Roberts never had to think much about Wall Street in the past, these days she watches the market with a wary eye -- for every day it fails to rebound represents a child she might not be able to serve.

Foundation gifts to Guadalupe are down about 15 percent this year. And next year will be worse, she says, maybe another 25 percent.

Last month Roberts received a letter from a foundation that has been a steady donor; Guadalupe's regular $40,000 grant was being cut by 60 percent. That one cut was the equivalent of a teacher's salary.

"That was tough," Roberts says. "But in a way it was a relief. We've known for a while that this is coming. At least they let us know what to expect. That will help us plan."

Preserve and protect -- the principal

Over the past decade, Utah's foundations have made grants totaling about 7 percent of their assets. That means some stick to the 5 percent minimum of giving required to remain eligible for tax breaks, while others give considerably more.

But that's not likely to be the case this year, says Salt Lake City attorney Clark Giles, who sits on the boards of several of Utah's largest foundations.

"Most of us feel we have an obligation to preserve and protect the foundation," he says. "We're likely to stick to that 5 percent rule."

What's the difference between 5 and 7 percent of Utah's $2 billion in foundation assets? Forty million dollars. That's roughly what it would cost to fund every homeless shelter in the state -- for a decade.

And that loss will come on top of what vanished in the markets.

Since foundations have different fiscal calendars and grantmaking schedules, the net effect of the market's dramatic drop may not be known -- or felt -- until well into 2009 and 2010.

But one early report from the Emma Eccles Jones Foundation -- one of Utah's largest grantmakers -- is a looming cloud on the horizon. According to IRS filings, the foundation was worth $120 million in August 2007. Just one year later it was worth $99 million. And that doesn't include September's market plunge -- those losses won't be reported until next year.

A recent survey of 57 grantmakers by the Chronicle of Philanthropy found a median endowment loss of nearly 30 percent in 2008. At that rate, those reliant on gifts from Utah foundations would be scrapping for a share of $71 million -- about half of the $139 million given away in 2005.

And it could be even worse.

The Investment Fund for Foundations manages the portfolios of more than 125 private foundations. Its three long-term investment funds lost an average of 35 percent of their value last year; its worst performing fund lost 43 percent.

The Starr Foundation, one of America's largest charities, was hit even harder. Stacked with stock from troubled insurer American International Group, it lost $1.6 billion last year -- almost 56 percent of its assets, according to IRS records and foundation reports.

Diversely and conservatively invested endowments might be insulated from that kind of loss, foundation officials say. But barring a change in strategy, those funds might also take longest to recover.

"I'd like to be optimistic," Giles says, "but I'm reluctant to set a timeframe. It may be a while before the foundations recover and get back to where they were."

'It broke our hearts'

Salt Lake City attorney Herbert Livsey's usually stern composure falters when he speaks about actions he and other board members took this year to ensure the viability of the S.J. & Jessie E. Quinney Foundation -- another of the state's biggest grantmakers.

"It broke our hearts to have to take this measure, but really, we had no other alternative," he says of the decision to send out letters, including the one received by Guadalupe, warning of cuts to come. "We thought it was better to let them know early in the year so that the organizations we have regularly donated to could better cope."

In 2007, the Quinney Foundation distributed more than $3.3 million in grants of General Electric stock to Ballet West, the Nature Conservancy, the Salt Lake Acting Company and the University of Utah -- gifts that helped fund performances, environmental protection programs and medical research. At that point, GE was selling at $38 a share. Today it's worth $12 -- and the Quinney Foundation still owns lots of it.

"Hopefully things will turn around soon," Livsey says.

But you can't pay the bills on hope. So non-profit leaders are making tough decisions -- cutting jobs, services and programs in anticipation of what is to come.

Abandoning the arts?

Congress appropriated $125 million to the National Endowment for the Arts in 2007 -- the largest federal arts budget in more than a decade. But that remained a far cry from the $149 million the NEA received in 1979, amid the nation's last deep recession. Adjusted for inflation, that's more than three times the current allotment.

Stepping in to fill the gap were hundreds of foundations, which supported arts organizations with investments that swelled during the same period that federal support dwindled. Now, faced with difficult choices, foundations are choosing vital needs over symphonies, ballets, museums and other cultural programs.

"We just had one foundation, with us since 1987, and they're telling us they're not going to give us anything this year and probably that's going to be true in the future," says Ririe-Woodbury Dance Company co-founder Joan Woodbury. Another foundation has told the company that it's dropping all arts programs.

The company has cut its staff and is canceling its usual weeklong tour through rural Utah. Further cuts could still be necessary. Meanwhile, just blocks away, Ballet West has cut jobs, frozen salaries and reduced benefits for its staff.

Environmental groups also stand to suffer.

The Healthy Environment Alliance of Utah began seeking other funding sources when grantmaking slowed following the terrorist attacks of Sept. 11, 2001. More individual donors, fundraising events and a healthy rainy day fund have provided a small buffer against another expected downturn, says executive director Vanessa Pierce. But foundations still support about two-thirds of the group's fight against pollution, toxic garbage and radioactive waste, so Pierce is wary of what's to come later this year, when the grant checks usually arrive.

She knows foundation leaders will be weighing a healthy world against hungry humans.

'Chasing the same dollars'

The lines at Utah's food banks are 30 percent longer this year than last. Among those asking for food are people who were pantry donors just a year earlier.

Utah Food Bank director Jim Pugh says foundation leaders have indicated they want to help, but that the timing is bad.

"It's a tough pill to swallow because the need has never been greater," says Pugh, whose charity gets about a fifth of its funding from foundations.

Salt Lake Education Foundation director Michael Williams, whose organization provides medical screenings, dental services, clothing and educational opportunities to students in Salt Lake City, says he knows grants will be down this year. He typically sends requests to about 100 foundations. This year he'll target 300.

"We're going to do everything we can," he says. "But it's tough, because it's all the same charities chasing the same dollars."

The University of Utah has seen a slight uptick in the value of grants it has received over the past year -- those gifts were generally based on how a foundation's investments did in 2007. But the future is uncertain.

"I don't know that it's going to be possible to keep the level of support that we've enjoyed over the last couple of years," says Fred Esplin, vice president for Institutional Advancement. "I suspect we won't be able to."

What could be lost?

"A lot of the giving is for scholarships," Esplin says. "We're definitely concerned about the effect this might have on the availability of financial aid for students."

The university's own endowment was down about 20 percent in 2008. Ever resilient, Esplin notes that the overall market fared far worse.

'It's creating jobs'

When the University of Utah broke ground on the James L. Sorenson Molecular Biotechnology Building last month, it set into motion a $130 million project that will provide paychecks for hundreds of construction workers over the next four years.

The Sorenson Legacy Foundation seeded the project with $15 million in cash -- jumpstarting an undertaking that Alan Rindlisbacher hopes will, in turn, help jumpstart the state's stagnant construction economy.

"It's creating construction jobs in an otherwise very tight time," says Rindlisbacher, a former state economic development officer who now leads marketing efforts for Layton Construction Company, which is heading the project.

But the Sorenson Foundation isn't likely to write any additional stimulus checks this year.

"We have made some fairly significant commitments," says foundation trustee Jim Sorensen. "We will fund those. But going forward, I would expect we'll be doing less."

Another top grant-getter is the U.S. Ski and Snowboard Association in Park City, which has helped define Utah as a place for world-class winter recreation -- much to the satisfaction of the state's $1 billion ski industry, which employs about 18,000 tax-paying workers each year.

There is almost no part of life in this state that foundation money does not touch.

'Take a look around'

Opera singers and nursing students. AIDS patients and preschoolers. History professors, environmentalists and homeless children.

Should the market determine each of their fates?

"No, I suspect it should not," says author Mark Dowie, "but if foundations are going to be structured on the revenue from a large endowment and if that endowment has to be invested in something, what are you going to invest it in? This is the world we live in."

In American Foundations: An Investigative History, Dowie takes a critical look at a relatively small, privileged group with enormous power to set social and cultural priorities. He contends that endowments shouldn't be seen as pure entitlements. After all, if it wasn't for federal laws that shield foundation money from estate taxes, about half would go back to the federal government.

Uncle Sam may or may not be able to put that money to any better use, Dowie says, but that doesn't absolve foundation leaders of their responsibilities in times of need.

"If they are calling themselves charitable institutions, they need to take a look around," he says. "The people and institutions that they are allegedly there to support are suffering."

Now, Dowie says, is not the time to be singly focused on protecting endowments and perpetuating legacies.

The boat is sinking. The storm is coming. And now is the time for a lifeline.

Reporter Kristen Moulton contributed to this report.

mlaplante@sltirb.com, kmoulton@sltrib.com