1978

The unprecedented economic growth of the industrial democracies in this century has improved the conditions of daily life for most sectors of society beyond any prior expectation. Real wages have increased three-to-fivefold since 1900, while hours of work have declined by a third. As a single inclusive indicator of enormous physical gains, life expectancy--which was estimated at about 20 years in the late Roman era and reached 40 years in the 19th century--has been prolonged another 20 years since 1900 in most of these countries. In the United States the average lifetime of white Americans has been extended from 48 years for men at the turn of the century to 69 today, and from 51 to 77 for women, with even greater relative gains for most minorities. Between 1900 and 1970 the percentage of seventeen-year-olds graduating from high school in this country increased twelvefold; and in the last thirty years the number completing degrees in higher education has more than tripled. During these same decades, massive programs to reduce illness, accident, unemployment, and destitution have been established here and throughout the modern industrial world. Yet with these advances have come problems that no nation adequately anticipated or yet knows how to resolve--a range of difficulties that leaves many people uncertain about where we are heading or how to reach the goals we seek.

The extraordinary quantitative changes in our times are an outgrowth of processes that have been more or less continuously at work over the past 200 years. In still longer historical perspective, they may be seen as cumulative results of the expansion of European civilization which reached out 500 years ago to embrace the resources and markets of much of the globe, and did so on terms of trade exceptionally favorable to advancing industrial nations. A powerful march of events was set in motion, built on abundant raw materials, expanding capitalism, widening opportunities for individual initiative, the spread of political democracy and a framework of law, and the compounding application of science and technology.

These lines of growth found their fullest expression on a vast, thinly populated continent unencumbered by inherited feudal institutions, where men and women of courage and vision were determined to create a new society. The selective transfer and fusion of Protestant individualism, the optimistic ideas of the Enlightenment, and the dynamic institutions of early modern commerce and industry fostered the systematic pursuit of earthly wealth on an unparalleled scale. The immense release of energies was reinforced in the American experience by an almost unlimited faith in progress and a conviction that the more abundant world would be a better one. Whatever its harsh edges or shortcomings, this underlying moral idealism has been a driving force legitimizing self-interest and material achievement--and without it the history of the United States cannot be properly understood.

Though shaken in the first half of this century by the great depression, two world wars, and heavy migrations into the cities, the nation experienced a surge of economic growth after World War II that enabled the average American family to double its real income between 1948 and 1968. Millions of Americans moved to the suburbs on a tide of prosperity, confident that the premises of an earlier era still controlled our destiny. Despite urban tensions and divisions caused by a demoralizing distant war, the United States thus entered the 1970's with its assumptions of progress and of the solvability of attendant problems almost intact.

We were accordingly little prepared for a decade in which the costs of energy and many other essentials (including food, fibers, and credit) moved radically upward; in which our international trade deficits rose alarmingly and undercut the dollar; in which family purchasing power, after taxes and price adjustments, advanced slowly and unevenly and for many sectors of the population actually declined; in which an intractable inflation eroded values of many kinds and threatened the ways people and institutions planned their futures; in which "the most powerful nation on earth" seemed far less able to manage its internal affairs or to influence the world outside; in which consequences of unguided growth and technology (such as those arising from the revolution in organic chemistry) raised increasingly disturbing questions; and in which costly government programs failed to meet objectives, and regulatory activities often seemed to compound difficulties they were intended to resolve.

The causes of present American discontents and uncertainties are obviously many (including an impatient feeling that we could be handling things much better than we are), but large among them is our reluctance to recognize how far-reaching are the changes now confronting the modern Western world--after an almost unbroken 200 or even 500 years in which the tide of affairs ran so dramatically in our favor. For cultures that have long accepted life as "a vale of tears," or for peoples that take adversity and the heavy hand of government, like the weather, as facts of life, the changes we are now encountering may be less disorienting. For us they are profound--not least in shaking the belief that a technological fix can be found for almost any problem and in challenging the unqualified faith in progress which has dominated our national life.

No philosophy or policy long proves useful if out of touch with reality. Too little recognition of the conditions under which the modern West is likely to be living may tempt us to overinvest in the search for villains and obscure the kinds of adjustments and planning new circumstances require. The industrial democracies have enormous capacities but must now adapt to a world in which their leverage has lessened and in which the exchange of goods and services may never again be as favorable to them as in recent centuries. They must recognize a network of increasing interdependence that leaves their complex economies vulnerable to the interruption of essential flows and linkages, and accept the probability that the efforts of other peoples to modernize--and to compress into a generation stages of social evolution that it took the West several centuries to accomplish--will repeatedly cause disruptive convulsions along the way.

Internally we must better comprehend a society in which accelerating applications of science and the impact of technological innovation on our daily lives have become a controlling dynamic of the culture, an experience intensified as well as illuminated by the information revolution of high-speed telecommunications and data processing. All this comes at a time when there is increased pressure for open access and participation in decision-making, when new constituencies are entering the mainstream, when there is less agreement on standards and the work ethic, or even on those values of material achievement around which the promise of American life has long turned. These are among the cumulative changes of which we need clearer understanding in order to define the constraints, objectives, and choices ahead--the trade-offs that will be necessary if we are to better balance ends and means on this increasingly crowded planet.

Among the most compelling constraints is the need to limit the population explosion that threatens all other gains human effort and intelligence can bring to improving man's lot on earth. World population has increased more in the last 100 years than it had from the beginning of the species until that time. Having slowly grown to approximately one billion in 1830, it reached two billion in 1930 and will have more than doubled again to an estimated 4.5 billion by the end of the 1970's. Barring the unpredictable, well over 6 billion people will crowd this earth by the year 2000, and the number then threatens to pass 10 billion in the following quarter-century unless disaster or family planning intervene. Recent evidence of a slight slowdown in the rate of growth must not obscure the relentless dynamics that will make absolute numbers continue to rise; more than 40 percent of the world's population is under 16 years of age. With approximately 80 percent of the growth since 1950 concentrated in Asia, Africa, and Latin America, the pressures on food supplies and other resources, on worldwide inflation, on the capacities of governments, and on international borders now seem to allow no realistic alternative to intelligent population control programs if hopes for decent lives are to have substance for large parts of the globe.

A second imperative which appears to allow little choice--and which bears particularly on the United States--is the need to be more economical in our use of energy and scarce natural resources. The modern world is burning up in little more than a century the liquid hydrocarbons it took nature 600-800 million years to form. With about six percent of world population, the United States is using more than a third of the global energy supplies. Our net petroleum imports, negligible till 1947, grew tenfold between 1950 and 1977, and the annual rate of increase thus far in the 1970's has averaged above 14 percent. Imports costing $45 billion in 1978 constitute almost half our current oil consumption and are the principal cause of the massive trade deficits that have undermined the dollar. All the weapons in the world cannot assure the security of Europe, Japan, and the United States (or the reliability of alliances) so long as they are dependent on supertankers moving in and out of the Persian Gulf through the narrow Strait of Hormuz at an average rate of one every hour.

Only somewhat less pressing is the need to develop national policies that assure long-term productive use of land and other critical resources. For two centuries both laws and markets favored the exploitation of virgin raw materials. Devouring demand now requires policies that encourage their best sustained use--including market mechanisms to promote recycling and conservation and to reflect the environmental costs of production and disposal in product prices--as well as programs that give fair representation to the interests of future generations and the general good in such matters as waste disposal and resource depletion. Perhaps nowhere are such policies more important than in long-term protection and proper use of arable land. Because prime farmland is the basic resource for feeding the nation and much of the world, and because food production is a crucial factor in our balance of trade, we cannot afford the continued loss of farmland through salinization, waterlogging, or the erosion of topsoil at twice the rate of its formation--or continue to have a million acres a year diverted to residential sprawl, shopping centers, and other uses.

On most other fronts the choices we face are seldom exclusive alternatives but rather how to plan, balance, and pace what we do and how we do it. Thus energy conservation, economic growth, and a healthy environment are all essential--both for the society and, at our present state of development, to each other. Without a vigorous economy jobs will not be available for the surge of women and young people now entering the labor force, or for affirmative action programs, or for realizing most other goals of less-favored sectors of the society. It is no less necessary for replacing energy-inefficient or polluting equipment, vehicles, and industrial plant, and for financing any transition to new energy sources. In turn there can be no viable economy over the long run if its ways of operating and using technology are not consistent with a healthy environment--the long-term maintenance of renewable resources and the natural processes of the biosphere on which life depends. Any system of accounts that properly reflects the external costs of industrial production must include the economic benefits of cleaner air and water, as well as the lower health and medical costs and other positive yields that derive from sound environmental management.

Again, in science and engineering the choices are seldom either/or; there is need of both large scale and small, hard and soft technologies. While smaller scale and simpler methods should be encouraged wherever they can do the job, large plants, laboratories, and highly sophisticated research and development will be needed to deal with intricate problems and operate complex industrial processes. Problems like eliminating or detoxifying wastes, converting byproducts into useful feedstocks, developing substitutes for scarce materials, and bringing alternative energy sources on line will require all the skills and tools available.

So too there can be no either/or choice in balancing current benefits against investment in future yields, or in the sum of private and public actions that shape these decisions. A prudent democracy must be mindful of both the present and the future, for a struggle over diminishing shares could threaten it profoundly--either now or later. By any historical standards the modern West has achieved remarkable success in grafting social programs onto free-market systems; but it would be false to assume that the exceedingly complex private-and-public economy with which we have been living in recent years stands in assured productive equilibrium. By its nature this "mixed economy" depends on an intensely interactive network of incentives and responses. Its essential capacity for renewal--via infusion of knowledge and ideas and sufficient capital to sustain productivity and meet new needs--is vulnerable to extreme demands of an egalitarian ethic for near-term distributive results and to unpredictable or unworkable interventions, or to monopoly practices or special interests that distort the market in other directions. And both sets of pressures can further fuel inflation.

The substantial decline in U.S. productivity growth and investment in research and development thus far in the 1970's, relative to our recent history and to current performance of other industrial nations; the cumulative consequences of inflation, high interest rates, and a depressed equities market; the insistent pressure for expenditures on military and mandated social programs; the short time-horizons of political decision-makers--all these can create conditions that undercut the resilience of a mixed economy, and thereby its capacity to generate the kind of employment opportunities and benefits a vigorous democracy naturally seeks.

The active presence of government has become part of the socioeconomic structure of modern industrial states--a product of history, of social objectives deeply rooted in the society, and of the pervasive impact of technological change upon daily life. Though forces that have led to the growth of government in this century are now embedded realities, the extent and forms of recent government penetration may not be. Yet simple recoil from regulation, however appealing, is not a viable course. Like the sorcerer's apprentice we have set loose an innovative process that calls for the magician's hand. Even voices that loudly protest against bureaucracy typically demand government intervention when problems appear--from polluted rivers to job hazards or escalating hospital costs--and business, labor, or the professions fail to regulate themselves. The challenge must be to make government economical, enlightened, and effective in moving toward accepted goals, and to minimize the contradictory intrusions of multiple jurisdictions operating on different schedules and with different criteria.

In the slow working of democratic processes there are signs that constructive compromises are emerging on some of these fronts--not least on the fundamental need to adjust the course of economic growth to environmental requirements. There also seems to be increasing recognition of the rising cost of regulatory detail; of the desirability of allowing room for reasonable private choice; and of the advantages of using the flexibility, initiative, and efficiency of market responses to meet defined performance standards wherever such mechanisms can work effectively--but with equal respect for circumstances where they do not. Still to be recognized is the need to balance current commitments against the requirements of future productivity (again in sustaining knowledge as well as production) and, where possible, to reduce uncertainties that impede rational processes of long-term, large-scale decision-making.

A major difficulty confronting the modern open society arises from the fact that many of its problems are of such complexity and demand such long lead times for effective response that they increasingly strain national capacities for timely decision and coherent action. The cotemporary world provides no natural synchrony for the cycles and phases of activities essential to the operation of the whole. The accelerating pace of science and technology, for example, frequently outruns the slower capacities of human institutions, habits, and perhaps even metabolism. Bringing large-scale economic installations into production often requires five to ten years, and double that for such major efforts as planning and developing alternative energy sources. Yet critical decisions for mobilizing efforts of this kind depend on resolving diverse interests and opinions within a political system governed by brief electoral cycles and pressed for short-term results. Furthermore, we are discovering that the still slower, deeper rhythms of the environment may conceal the consequences of our actions for much longer periods--for most of a human lifetime perhaps, or, in their impact on climate and the oceans or on the intricate genetic chain, for several lifetimes. While education is probably our best hope for understanding and addressing these conflicts, it too has its own cycles and generations; and its capacities are limited and, at present, severely strained.

Modern society thus faces the problem of trying to operate and respond to an immensely complicated clock, with its gears and dials out of phase and scale. Traditional societies, organized around simpler, steadier technologies and slower tempos, work out reasonable inner harmonies that give coherence, predictability, and legitimacy to the cycle of events and to methods of reaching agreement on what must be done. A society moving as fast as ours feels the dislocations of time and place, of phases and cycles, and of compounding diversity, and suffers the consequences in dysfunction even while it embraces the system's abundant yield.

The problems of phasing and coordination underline the difficulties--and the importance--of more consistent planning to avoid unintentional disturbance of interacting sectors and systems. Indeed, some European economists have commented that the United States may now be the victim of a double affliction: it lacks the degree of coordination that a free-market system formerly provided but resists the minimum of integrated planning that modern industrial economies may require. Our alternative has been, and continues to be, to seek consensual solutions through political and economic mechanisms formed in and for simpler times, and frequently not up to today's tasks and timetables.

Though the profound changes we face are not the product of any single decade, their cumulative impact--and the need to find more effective responses--has come upon us with startling force in the 1970's. As a culture we know a great deal more about the individual problems before us than about the ways they are linked to each other, or about how to achieve consensus or bring best knowledge to bear on the formulation of public policy. The immediate challenge may be whether our capacity to understand the fundamental changes that have occurred, to balance conflicting pressures, and to coordinate responses can keep pace with our need to do so.

A number of these considerations have entered into the Foundation's substantial increase in its 1978 funding in areas of population control, conservation, resources and the environment, and in certain fields of economic analysis and public affairs.

In the population field the Foundation sustained the higher level of commitment it undertook in 1977 and awarded grants totalling $3.75 million to five centers of research in reproductive biology and population dynamics for use over approximately three years. The intention in making these grants was to provide funds, at a few additional leading centers of research, for postdoctoral and junior-faculty appointments through which young scientists of unusually high ability could participate in research led by able senior scientists, and then move on to their own investigations. These grants follow upon awards made in 1977 for similar purposes and a major three-year grant to the Population Council. In a broader field--the nation's use of resources for health care and maintenance a grant of $750,000, for use over a period of approximately three years, was made to assist the Institute of Medicine of the National Academy of Sciences in further developing its independent capacity to analyze and advise on critical health policy issues.

The Foundation in 1978 more than doubled its support of programs and organizations working in the fields of conservation, natural resources, and the environment. It provided an additional $150,000 to enable the Bio-Energy Council to carry forward its directory of bioconversion projects in commercial operation or of promising potential. Part I of this directory was published early in 1978; parts II and III are underway. A further appropriation of $500,000 will enable the Bio-Energy Council to evaluate bioconversion techniques or research-leads and assist those meriting interim developmental support.

In response to growing concern over toxic chemicals, a grant of $370,000 was made to the Environmental Law Institute toward the costs of research on toxic substances control, in addition to funds for increasing the effectiveness of its library on environmental law. The Foundation has also continued to be a primary supporter of the Conservation Foundation's efforts to bridge the distance between environmentalists and business leaders and, in particular, to help major chemical companies and leading environmental groups reach general agreement on methods for testing new chemicals, which promises to reduce litigation and lessen delay in implementing the new federal laws on toxic substances. A grant of $1 million was given to the Nature Conservancy toward the $20-million revolving Land Preservation Fund it is building for early acquisition or protection of important sites to allow time for working out strategies appropriate to their long-term preservation.

Following upon a 1975 grant in partial support of a comprehensive study of U.S. energy options, the Foundation this year made a $500,000 grant to Resources for the Future (RFF) toward the costs of a series of environmental studies over a five-year period. At year-end a further major appropriation of $2.5 million to RFF was approved, conditional upon its assembling a total of $20 million or more in funds functioning as endowment or available for long-term general or program support. The purpose of these funds would be to sustain RFF's continued existence as an independent national center for analysis of public policy issues relating to natural resources, energy, and the environment.

The Foundation also made a few grants in 1978 designed to bring economic analysis to bear on major issues of public affairs. Our intent is not to shift large resources to a general program of support for economic research but rather to encourage a few of the strongest centers, under good leadership, to re-examine some fundamental problems in public policy. The largest of these grants--$750,000--went to the National Bureau of Economic Research to assist it to conduct an intensive program of research on U.S. capital formation and to analyze the reasons for its decline in recent years. Further support will allow the Bureau to organize and publish a conference volume on "Post-War Changes in the American Economy," in which senior figures will review research summaries on a dozen sectors and reflect on structural changes in the economy over the last thirty years. A grant of $275,000, with somewhat similar intent but more recent in its focus, went to The Brookings Institution to enable it to complete an analysis of inflation and employment in recent cycles and to publish a conference volume reviewing key lessons about the performance of the economy and the economics profession in the 1970's; and to study the usefulness of wage subsidies in enabling private employers to hire and train young people and others among the structurally unemployed.

A grant of $250,000 went to the Harvard Business School in support, over approximately a three-year period, of a program of research and training under Professor John Dunlop's direction focusing on processes of business and government decision-making and policy-formulation that reach beyond traditional macroeconomic analysis. The program is designed to combine research with practical experience in the resolution of actual problems within and among major institutions of the society--notably businesses, labor organizations, and government agencies. Following upon a 1976 grant toward a study on "Improving the Long-Term Performance of the U.S. Economy," a further appropriation this year will assist the Committee for Economic Development in a study of technology policy and the U.S. economy which will analyze other current studies and provide policy recommendations.

The Foundation continued its major commitment to higher education and humanistic learning in 1978 through a variety of programs, old and new. Its largest new undertaking responds to the severe contraction of opportunities for the advancement of younger scholars in the humanities, a situation which threatens the cumulative process of scholarship and the flow of leadership these fields will need in the 1980's and 1990's. Following an earlier (1974-1976) program which provided $22 million to support approximately 280 term appointments and 65 endowed positions at the postdoctoral or junior faculty levels at 25 universities, this new program focuses on the intermediate level of an academic career. Appropriations totalling $9.3 million were made on a matching basis to six independent universities that stand among the leaders in graduate education in the humanities to enable them to create opportunities for appointing, retaining, or advancing to tenure some outstanding younger talent where this would not otherwise be possible.

While hopeful that the recommendations of a Presidential Commission may yet reestablish an appropriate measure of government support for foreign language and area studies, the Foundation proceeded with three further grants in support of East Asian studies, and made awards of $600,000 each to the Russian research centers at Columbia and Harvard, both of which have distinguished records in advanced research and training. The Foundation this year balanced its recent support of research and graduate studies on Canada with grants for scholarly research and training focused on Mexico and Latin America: $500,000 to the Social Science Research Council in support of the activities of the Joint Committee on Latin American Studies, with particular attention to demographic and population issues; $380,000 to Yale University to support its program in Latin American Studies and for a study of Latin American systems of higher education; and $110,000 to the University of Texas in support of its Mexican-United States Border Research Program.

In recognition of the important role played by the American Council of Learned Societies in advancing humanistic studies and of its major effort to build long-term financial stability, the Foundation made it an endowment award of $1 million, the income to be used in support of a fellowship program for recent recipients of the Ph.D. We also continued in 1978 major efforts to assist the nation's research libraries in developing new capacities for serving their users in the face of sharply escalating costs. A grant of $1.5 million went to the Council on Library Resources toward the very substantial costs (estimated to exceed $6 million) of a plan in which several foundations are participating to develop and establish a national computerized bibliographic system--a system that of necessity will transform methods of access to and operation of the nation's libraries and increase the range of information they can provide. A grant of $294,000 to the Association of Research Libraries will help launch a new Academic Library Program to assist libraries at universities and liberal arts colleges in assessing their services, collecting objectives, and management capabilities. The program should affect a total of 300 libraries over a five-year period.

The Foundation continued its commitment to strengthening undergraduate education in several areas. Within a program begun in 1974 to assist a number of liberal arts colleges of academic strength and leadership in developing plans for faculty and curricular renewal, nine additional grants were made, bringing to 53 the institutions thus helped with funds that now total just over $11 million. As part of its sustained concern for minority access to higher education and for other underserved populations in this country, the Foundation made four additional awards in a program begun in 1977 to strengthen humanities and arts teaching at selected leading black colleges, with direct grants going this year to Fisk, Morehouse, Tougaloo, and Tuskegee; and $500,000 was given for similar purposes to the United Negro College Fund on behalf of its member colleges and universities. A grant of $340,000 will enable the Committee on Institutional Cooperation, representing Chicago and the Big Ten Universities, to administer a fellowship program for selected minority students in the humanities; and renewed support to A Better Chance will sustain its "target cities" effort to enlarge the pool of qualified minority applicants for college. A new program was also begun to assist faculty and curricular development at selected four-year private colleges in Southern Appalachia which have demonstrated the strength, leadership, and commitment to serve their region well. Under this program the first six grants went to Berea, Davis and Elkins, Emory & Henry, Mars Hill, Maryville, and Warren Wilson Colleges.

Grants to three universities--Chicago, Stanford, and Yale--will sustain programs designed to provide opportunities for the professional growth and development of faculty members teaching undergraduates at surrounding institutions of higher education. During 1978 the Foundation also made a limited number of grants to help raise academic standards and strengthen basic skills (in writing, reading, and mathematics) in elementary, secondary, and college education. A grant to the National Humanities Faculty will support a pilot program to engage associated college and university faculty members--presently concerned with the improvement of humanities teaching at the high-school level--in strengthening humanities teaching and curricula in selected two-year colleges.

Finally, cultural organizations and the arts have remained another major area of Foundation activity.

At a brief ceremony on June 1, 1978, the new East Building of the National Gallery of Art in Washington, a project with which the Foundation has been substantially involved for several years, was presented to the nation by Paul Mellon as President of the Gallery and accepted by President Carter. Widely acclaimed for its bold design and imaginative use of a critical site, the new building has permitted the Gallery to expand its exhibition, storage, and service areas, and particularly to provide space for larger and more monumental works of art, both past and modern, and to present major exhibitions, such as that from Dresden, for which space was lacking in the original building. The new East Building will also furnish working facilities for the curatorial staff and visiting scholars and will shortly house an important art library and photo archive--the beginnings of what should become a significant center for advanced study in the visual arts.

Completing a program begun last year which provided matching permanent endowment grants to a number of American symphony orchestras, the Foundation made similar awards, amounting to $500,000 in all, to four additional orchestras; and grants totalling $2.35 million to eight independent music conservatories--institutions that carry a major burden for the professional training of musicians. The grants are intended to strengthen these important organizations and help them maintain the quality of their teaching programs.

In the field of art conservation, the Foundation appropriated $750,000 in matching endowment to New York University's Institute of Fine Arts in support of the Institute's Conservation Center, one of the country's leading training programs, which will be moving into expanded new quarters in 1980. Other awards went to five museums to permit them to conduct advanced conservation apprentice training programs in which starting practitioners can mature their skills at institutions where the facilities, the conservation staff, and the quality and range of the collections offer superior opportunities. Assistance was also provided to a regional laboratory serving colleges and museums in western New England and upstate New York; and $675,000 was appropriated to Carnegie-Mellon University for use over three years in further support of the Research Center on Materials of the Artist and Conservator.

While the Foundation has no formal program for public television, it has been able to respond on a highly selective basis to the occasional project of exceptional merit that falls within our interests in the arts and humanities. This year an award was made to WGBH toward the production of a four-part series based on Nathaniel Hawthorne's The Scarlet Letter; and a conditional award went to WNET to support a series on "The Meanings of Modern Art." Other assistance totalling $1.5 million was given to WGBH, WNET, KCET, and the Public Broadcasting Service to enable each to establish a research and development fund to seek and encourage promising ideas for television programs in the arts and humanities. The awards are intended to give some flexibility to the sensitive pre-pilot stage of planning, where some risks must be taken and some margin for failure allowed in the search for programs of distinction.

As a part of its special concern for major national cultural organizations, the Foundation made a grant of $750,000 to the Metropolitan Opera Association to be used as a development fund to assist the Opera while it seeks to increase earned and contributed income--on lines that may prove useful to other institutions--and to help with the expenses of launching its centennial endowment campaign.

A Summary of major grants follows, arranged under main program headings, and thereafter a complete listing of all grants made during 1978 by category and institutional recipient. The Foundation made appropriations of $48,348,175 in 1978 and paid out $42,680,961. The total amount appropriated for charitable purposes by The Andrew W. Mellon Foundation and its predecessors, the Avalon and Old Dominion Foundations, has now reached $508,629,705. The Foundation received $48,729,031 in net income during 1978 after investment expenses and federal excise tax. In accordance with the new accounting standards prescribed for non-profit organizations the Foundation's accounts this year and hereafter will be reported on an accrual basis. The market or appraised value of its assets on December 31, 1978 was $741,515,000.

As of January 1979, William Robertson IV, formerly on the staff of the Commission on Natural Resources of the National Research Council, joined our staff as a program director.

In allocating its resources, the Foundation works within the defined programs set forth on the opening page of the report. The fairly simple and straightforward procedures outlined there will usually suffice for determining whether a proposal falls within the scope of our current programs. Though the growth of income has again made possible increased distributions, which each year have exceeded the percentage-of-portfolio payout required by federal tax laws, the Foundation can still respond favorably to fewer than five out of every hundred requests. It remains our intent, however, to give careful consideration to all promising ideas in our program fields; to explore plausible and manageable additions to them; and to see that inquiries are handled promptly, reasonably, and courteously.

JOHN E. SAWYER
President
March 1, 1979