BREAKING GROUND is an apt theme for this annual report, reflecting a year in which we launched new statewide initiatives and literally broke ground on construction of our new multipurpose facility in downtown Los Angeles. This annual report explores the groundbreaking work we have supported and presents information concerning our governance, grant making and resource management for fiscal year 2004-2005.

In the last fiscal year, ending Feb. 28, 2005, The California Endowment awarded 1,422 grants totaling more than $165 million. Our grant making supports efforts that contribute to California becoming a place where everyone has the opportunity to be healthy and reach his or her full potential.

Healthy Eating, Active Communities and the Children's Coverage Program, launched by The Endowment and profiled in these pages, are prime examples of ways in which we have increased our support of local and statewide advocacy for meaningful policy and systems change on behalf of California's underserved communities. With our partners and grantees, we have been at the forefront of expanding the public discussion beyond an emphasis simply on health care. We join with others in asserting that an investment in prevention at the community level, and addressing health lifestyles and behaviors and the conditions where people live and work, are just as important to address as access to quality, affordable health care.

In this past year, we revisited our five-year strategic plan and implemented a midcourse modification to make us even more effective as a foundation in the rapidly changing, complex health environment. We tightened our focus on the three goals we believe are essential to the health of Californians: access to health, culturally competent health systems, and community health and the elimination of health disparities. These will lead us to better focus our resources in making a strong impact on health and health care for communities that most need change.

Last year, as well, the foundation broke ground on construction of our new home, a 118,000 usable-square-foot multipurpose facility in downtown Los Angeles. The complex includes our administrative offices, Los Angeles program office and the new Center for Healthy Communities. The Center and its programs are designed to mobilize community leaders, advocates and public policymakers to engage in collaborative action to improve the health and health care of California's underserved communities. You can read more about the Center in this report.

Through its offices in the Central Valley and Sacramento, The Endowment made a major commitment to a regional strategy to support community-based responses to some of the urgent health-related needs of 5,087 Hmong refugees who resettled in California at the end of 2004, after being forced to leave Thailand. The Hmong Resettlement Health Project builds on the leadership and voice of the Hmong community and builds bridges among the community, service providers and the multiple counties that will experience the greatest impact as a result of the resettlement.

In Oakland on Sept. 16-17, 2004, The Endowment joined more than 250 participants in The Power of Community in Health: A Showcase of Community Health Center Advances, a conference to celebrate the progress of the community health center movement, acknowledge the achievements of health centers' community board members and to discuss the future role of community-based health centers in the 21st Century. Born out of the civil rights movement more than 30 years ago, community-based health centers have become the backbone of the health care safety net and a leading example of how to provide culturally competent quality health care to low-income communities across the United States. Given the state's continuing budget crisis, it is important that The Endowment, among other funders, support groundbreaking research publications, including "Stretched Thin: State Budget Cuts Threaten California's Health and Human Services Programs," based on surveys of 11 counties' health and human service programs by the California Budget Project. Also published was "The State Budget and Local Health Services in California: Surveys of County Officials," a report by the Public Policy Institute of California, analyzing how local health programs in California fared in the context of the state's budget situation in fiscal year 2003-2004.

Though we face serious challenges, we are proud to collaborate with grantees and other partners committed to profound changes in the systems, policies and organizations that influence the health of Californians. In the following pages you will get a sense of the sweep of such efforts and their impact on communities and individual lives. These stories are about farm workers in north Santa Barbara County, young people in Oakland's inner city, Baldwin Park residents in Los Angeles County, immigrant health professionals in San Francisco, refugees from the Horn of Africa in San Diego, and children and their families in Santa Cruz County. They are a testament to the groundbreaking, visionary community leadership that is contributing to better health around our state.

Sincerely,

Cynthia Ann Telles, Ph.D
Chair of the Board of Directors

Robert K. Ross, M.D.
President and CEO