2009 Annual Report
Investing in People and Ideas
C O R P O R AT I O N
rand Board of Trustees
December 2009
Paul G. Kaminski (Chairman)
Michael Lynton
Chairman and Chief Executive Officer, Technovation, Inc.;
Former U.S. Under Secretary of Defense for Acquisition and Technology
Chairman and Chief Executive Officer, Sony Pictures Entertainment
Karen Elliott House (Vice Chairman)
Former Publisher, The Wall Street Journal;
Former Senior Vice President, Dow Jones and Company, Inc.
Barbara Barrett
President and Chief Executive Officer, Triple Creek Ranch;
Former U.S. Ambassador to Finland
Richard J. Danzig
Chairman, Center for New American Security;
Former U.S. Secretary of the Navy
Francis Fukuyama
Bernard L. Schwartz Professor of International Political Economy,
Paul H. Nitze School of Advanced International Studies,
Johns Hopkins University
Ronald L. Olson
Partner, Munger, Tolles & Olson LLP
Paul H. O’Neill
Former U.S. Secretary of the Treasury
Michael K. Powell
Former Chairman, Federal Communications Commission;
Senior Advisor, Providence Equity Capital; Chairman, MK Powell Group
Donald B. Rice
President and Chief Executive Officer, Agensys, Inc.;
Former U.S. Secretary of the Air Force
James E. Rohr
Chairman and Chief Executive Officer, The PNC Financial
Services Group
Richard Gephardt
James F. Rothenberg
President and Chief Executive Officer, Gephardt Group
Government Affairs; Former U.S. Congressman
Chairman and Principal Executive Officer, Capital Research
and Management Company
John W. Handy
Hector Ruiz
Former Executive Vice President, Horizon Lines, Inc.;
General, United States Air Force, Retired
Chairman, GLOBALFOUNDRIES
Jen-Hsun Huang
President and Chief Executive Officer, NVIDIA Corporation
John M. Keane
Senior Managing Director and Cofounder,
Keane Advisors, LLC; General, United States Army, Retired
Lydia H. Kennard
Carlos Slim Helú
Honorary Life Chairman, Grupo CARSO, S. A. de C.V.
Donald Tang
Chief Executive Officer, CITIC Securities International Partners
James A. Thomson
President and Chief Executive Officer, RAND Corporation
Former Executive Director, Los Angeles World Airports
Robert C. Wright
Philip Lader
Former Vice Chairman, General Electric; Former Chairman and
Chief Executive Officer, NBC Universal; Chairman and Cofounder,
Autism Speaks; Senior Advisor, Lee Capital
Chairman, The WPP Group; Former U.S. Ambassador
to the Court of St. James’s
Peter Lowy
Trustees Emeriti
Chief Executive Officer, Westfield, LLC
Harold Brown
Counselor, Center for Strategic and International Studies;
Former U.S. Secretary of Defense
Frank C. Carlucci
Chairman Emeritus, The Carlyle Group;
Former U.S. Secretary of Defense
Contents
3 Investing in People and Ideas
Message from the Chairman and the President
Healthy Societies
Strategy & Diplomacy
Children & Families
Energy & Environment
Conflict & Instability
Global Recession
16 Outreach
18 Our People
20 Educational Opportunities
22 Philanthropy at RAND
24 Policy Circle
28 RAND Advisory Boards
36 Clients and Grantors
38 Financial Report
C O R P O R AT I O N
Message from the Chairman and the President
Investing in People and Ideas
T
he year 2009 was a productive one for the RAND Corporation. We remain, as always, committed
to research and analysis that is of the highest quality, decidedly nonpartisan, and rich in its
potential to solve some of the world’s most vexing problems. This, despite some challenging
trends—such as unprecedented partisanship among U.S. policymakers and a global financial environment
in which we see ever-greater competition for funding among nonprofit institutions such as RAND.
The vast majority of the policy research at RAND is supported by our clients and sponsors. But sometimes
we need to move beyond that work, to integrate it, supplement it, and sometimes break new ground in
policy areas outside the boundaries of sponsored
research. We do that with our “Investments in
People and Ideas.” The program, largely bolstered
through philanthropic support, helps RAND
continue to lend an objective, evidence-based voice
to big, often divisive issues; to engage the most
talented individuals to be a part of that effort; and
to reach the broadest possible audience to ensure
our research and analysis can be used to shape
decisions and improve outcomes.
Our work in 2009 rests upon more than 60 years
of sustained investment in people and ideas, and
demonstrates how this investment has helped build
and will contribute to building a better world. Our
investments in healthy societies paid off with solid
projections for U.S. health care reform and timely
preparations for pandemic flu. Our investments
in children and families evaluated charter schools and appraised the challenges facing children in military
families. Our investments in understanding the global recession found fraud and error in the social safety
nets of developing countries and took stock of the coping mechanisms of U.S. households.
Our investments in energy and the environment are helping Israel to maintain its energy self-sufficiency
and exploring how commercial buildings can become more energy efficient. Finally, our broad portfolio
in global security and conflict abatement has produced valuable insights for promoting security in
Mexico and the United States, dealing with nuclear proliferation, understanding China, facing Iran, and
stabilizing Iraq and Afghanistan.
In these and other areas, it is RAND’s adherence to our core values of quality and objectivity that gives
confidence to our clients and philanthropic supporters—and makes RAND a trusted resource for the
policymakers who use the ideas we generate.
We believe our investment in people and ideas makes communities around the world safer, healthier,
and more prosperous. We thank our clients and donors for supporting our research endeavors in 2009,
and we look forward to continuing in this tradition with their support in the years to come.
James A. Thomson
Paul G. Kaminski
President and Chief Executive Officer
Chairman, RAND Board of Trustees
Providing Evidence to Support
Healthy Societies
RAND ideas are helping to improve the health of people around the world.
Researchers examine what works, what doesn’t, and where we should channel
resources to yield the best possible outcome. RAND’s investment in improving
health in 2009—ranging from health care reform in the United States and
patient safety in Europe to influenza preparedness throughout the world—
results in long-term dividends for us all.
A+
F I N D I N G S
U.S. Health Care Reform
In 2009, RAND launched
COMPARE (Comprehensive
Assessment of Reform Efforts),
a transparent, evidence-based
approach to help decisionmakers
assess the effects of reform proposals
on health care system performance
(such as access, quality, and cost).
COMPARE offers objective analyses of policy options being
used, considered, or discussed by public and private policymakers.
COMPARE was developed over many years in anticipation of the
enormous consequences and considerations for dramatically revising
the way health care in the United States is delivered and managed.
The COMPARE resources and tools were briefed widely to
Congress and other key stakeholders and its analytic features were
used to help evaluate proposed reform bills and variations among
them. Designed to be comprehensive, user-friendly, and flexible,
COMPARE is a tool that has innumerable applications and can
be used by a wide variety of stakeholders to better understand and
evaluate this complex issue.
Responding to H1N1
For years, RAND has been at the
forefront of policy discussions to help
improve preparedness for a potential
influenza pandemic. RAND’s
contributions helped facilitate a
unified global response to the H1N1
influenza pandemic in 2009. A set
of RAND global exercises helped
strengthen regional disease surveillance response capability in
three regions: The countries and two provinces of China that share
the Mekong Delta of Southeast Asia; a Middle East consortium
involving Jordan, Israel, and the Palestinian Authority; and a
similar group involving India, Pakistan, and Bangladesh. RAND
also worked with the U.S. Department of Health and Human
Services and the Centers for Disease Control and Prevention to
clarify the roles of national and local agencies during a pandemic,
develop a guide for managing critical decisions that will be needed
prior to and during a pandemic, and improve essential data
collection on matters such as the incidence and severity of seasonal
influenza and the supply and effectiveness of vaccines.
Giving California
physicians financial
incentives to improve
the quality of medical care stimulates
changes in practice
that advance quality.
23
In a first-of-its-kind
effort to construct
a comprehensive
assessment
Billion national
of the costs of the
methamphetamine problem in
the United States, a study by
the RAND Drug Policy Research
Center revealed the economic
cost to be $23.4 billion in 2005.
The analysis considers a wide
range of consequences of meth
use, including the burden of
addiction, premature death, drug
treatment, and lost productivity,
among other factors.
$
Use of radio
frequency
identification
technology in
Europe to track
patients and their conditions
can increase patient safety
and reduce costs.
$18 billion could
be saved in annual
health care costs
if Americans reduce
sodium intake to recommended
amounts.
People in poor
physical and
mental health suffer
disproportionately
from disasters,
revealing the need for public
health agencies to collaborate
with community partners and
care providers on improving
preparedness among chronically
vulnerable populations.
Investing in People and Ideas
5
Sharing Expertise to Advance
Strategy & Diplomacy
Old patterns of state-to-state and bloc-to-bloc relations are now eclipsed by global
concerns that cut across functional disciplines and regional boundaries. With a focus
on world political, economic, social, and military trends, RAND activities in 2009
helped provide a better understanding of pressing issues impacting global relations.
C
Iran—Dangerous But Not Omnipotent
In recent years, Iran has consistently been at odds with the
international community, with
its challenges to U.S. interests being notably aggressive
and urgent. To some, Iran’s
provocative positions on its
nuclear program, support for
nonstate militants, and development of threatening military capabilities suggest that it is trying to effect far-reaching changes on both the
regional and global stage. Within this context, a 2009 RAND report
aims to provide policy planners with a new framework for anticipating
and preparing for the strategic challenges Iran will present over the next
10–15 years. The study assesses four critical areas—the Iranian regime’s
perception of itself as a regional and global power; Iran’s conventional
military buildup and aspirations for asymmetric warfare; its support to
Islamist militant groups; and its appeal to Arab public opinion. RAND
researchers offer a new U.S. policy paradigm that seeks to manage the
challenges Iran presents by exploiting regional barriers to its power and
vulnerabilities in the regime’s strategic calculus.
Understanding China
As China evolves from a
centrally planned communist
dictatorship to a less authoritarian state with an increasingly market economy and
rising economic clout, it is
no longer appropriate to talk
of integrating China into the
international system. By and
large, it is already there—active in regions and on issues that were once
only peripheral to its interests. Chinese policymakers and analysts refer
to China’s rise as a “revitalization” and “rejuvenation,” but its goal to
reclaim its status as a great power remains poorly defined or articulated.
RAND experts studying the issue put China’s transition into context,
examining how China views its security environment; how it defines its
international objectives; how it is pursuing these objectives; and the
consequences for U.S. economic and security interests. One of China’s
greatest challenges as it defines its future security role in the region and
the world is to harmonize its own view of its security intentions with
that of the outside world: China’s future political evolution remains
uncertain, and that leaves other nations uncertain about its future role.
O
M
M
E
N
T A
R y
RAND researchers
are important
opinion leaders on
international policy
issues. In addition to dozens of
monographs, reports, books, and
articles, they published commentary
in 2009 that included the following:
Defeating Hamas Will Not
Defeat Iran by Dalia Dassa Kaye
(ForeignPolicy.com, January 14)
Asia’s Nonproliferation Laggards:
China, India, Pakistan, Indonesia,
and Malaysia by Charles Wolf, Jr.
(Wall Street Journal Asia,
February 9)
Obama’s Foreign Policy Team
and U.S.–Korean Relations by
Chaibong Hahm (Joangang Ilbo,
February 16)
To Talk With Iran, Stop Not Talking
by James Dobbins
(WashingtonPost.com, March 3)
Obama’s Turkish Dilemma
by F. Stephen Larrabee
(CNN.com, April 6)
N.K. Provocation Suggests
Regime in Trouble by Bruce
Bennett (The Korea Herald, April 9)
European Union at Cross
Purposes in Kosovo by
Christopher S. Chivvis
(GlobalSecurity.org, April 27)
How Russia Can and Can’t Help
Obama by Brian Michael Jenkins
(ForeignPolicy.com, August 26)
G-20 Growing Pains by Lowell H.
Schwartz (Pittsburgh Post-Gazette,
September 24)
China: Self-Perception vs. Outside
Perception by Michael J. Lostumbo
(World Journal, October 2)
Keeping Our Allies on Our Side
in Afghanistan by Leo Michel and
Robert E. Hunter (Los Angeles
Times, October 27)
Take the War to Pakistan by Seth
G. Jones (The New York Times,
December 4)
Investing in People and Ideas
7
Improving Outcomes for
Children & Families
RAND has long explored ways to improve policies that affect the well-being of
children and families. In 2009, RAND addressed a range of issues, including the
mental health of students exposed to trauma, the effect of the economic crisis
on parents and children, and cultivating academic improvement among primary
school students in communities as distinct as New york City and Qatar. RAND’s
people and ideas are trained on improving outcomes for children and families.
F I N D I N G S
Evaluating Charter Schools
As the number of charter schools
in the United States grows,
debate continues about whether
charter schools provide a better
education experience than
traditional public schools. A 2009
RAND study examining charter
schools in Chicago, San Diego,
Philadelphia, Denver, Milwaukee,
and the states of Ohio, Texas,
and Florida was the first to use
longitudinal, student-level data to
examine the issue across multiple
communities and varied charter
laws. Researchers found that charter schools do not generally draw
the top students away from or substantially affect achievement in
traditional public schools; and that charter middle and high schools
produce test-score achievement gains that are, on average, similar to
those of traditional public schools. The data indicate, however, that
high school students in charter schools had a higher probability of
graduating high school and attending college.
Challenges for Military Children
A 2009 RAND study
examined the wartime wellbeing of 1,500 children from
military families—the largest
study to date that explores
how these children are
faring academically, socially,
and emotionally during an
extended period of parental deployment. Researchers found that,
compared with other American youths, these children may suffer
from more emotional and behavioral difficulties, with older children
and girls struggling the most when a parent is deployed. Although
the study found no significant differences among children based on
what service a parent served in or whether the parent was part of the
active or reserve component of the military, the longer the period
of time a parent had been deployed over the previous three years,
the greater the likelihood that a child reported deployment-related
difficulties. The project was commissioned by the National Military
Family Association, an independent nonprofit group that provides
support and services to military families.
of American children
have already had
sex by the time
their parents initiate “the talk,”
according to a 2009 RAND study.
The analysis suggests that parents
educate their children earlier in
life about sexually transmitted
diseases, birth control, and what
to do if a partner refuses
a condom.
Findings about the
socioeconomic,
health, safety, and
educational disparities
faced by boys and
men of color are being used by
The California Endowment to help
the foundation determine how to
most effectively allocate funds to
serve these populations.
RAND produced
research briefs for
the incoming Obama
administration
and the 111th Congress on
five key education priorities:
Improving Accountability in Public
Education; Increasing Participation
in No Child Left Behind School
Choice; Designing Effective
Pay-for-Performance in K–12
Education; Promoting Effective
Preschool Programs; and The Role
of Charter Schools in Improving
Education.
One-on-one work
between teachers and
students played an
important role in the
ongoing success of the nation of
Qatar’s education reform efforts,
according to a 2009 study of
independent schools that adopted
new curricula and teaching
methods.
Depression in teens
is linked to lower
grades; more days
of impairment; and
coexisting emotional
and behavioral problems,
such as anxiety, post-traumatic
stress disorder, hyperactivity,
drug use, and aggressive
behavior.
Investing in People and Ideas
9
Improving the Use of
Energy & Environment
RAND work in energy and the environment builds on a long history of research
on the interrelated issues of natural resources and economic development.
Researchers with a variety of backgrounds—economists, physicists, chemists,
and engineers—contribute to projects that address a broad range of concerns
from environmental regulation, climate change, and energy resources to
agriculture, natural hazards and disasters, and national security.
F I N D I N G S
Israel’s Energy Future
Israel is running out of capacity to meet
its electricity demands. Its power grid is
not connected to that of any other nation, making it an electricity “island.”
In a project commissioned by the
Nazarian Family Foundation, RAND
researchers built analytic tools that
Israel’s planners can use to enhance enJORDAN
ergy supply security while still meeting
goals for cost, environmental protecEGyPT
tion, and land use—especially when
the economic, technological, political,
and energy future is so uncertain. Key findings from the RAND
analysis indicate that Israel can make natural gas usage a bigger part
of its energy portfolio without jeopardizing its security, but the single
most important factor to having a successful energy policy is for Israel
to slow the growth in demand for electricity and use its energy more
efficiently.
LEBANON
SyRIA
West
Bank
Gaza
Strip
Green Buildings
In developed
countries, more
than a third of
all energy is used
to heat, cool,
and illuminate
buildings—often
inefficiently.
A 2009 RAND
study examines
the European Union’s and Australia’s experiences driving energy
efficiency in the building sector. The study profiles various public
policy approaches Europeans and Australians have used to overcome
market imperfections and drive investment in efficiency. Both
Europe and Australia accord special roles to public buildings to build
efficiency awareness and support innovation. Tighter building codes
are slow to work but, if they are clear and consistently enforced,
can make a difference. Systems to rate the efficiency and design
characteristics of buildings can give consumers information about
expected energy performance and serve to increase the value of highperforming buildings, but only with a cadre of well-trained inspectors.
And successful energy efficiency programs for buildings can create
well-paying “green jobs.”
In a study for the
U.S. Federal Aviation
Administration
conducted jointly by
RAND and the Massachusetts
Institute of Technology,
researchers found that three
alternatives to petroleum-based
jet fuel may be available in
commercial quantities in the next
decade. However, limited biomass
and plant oil resources severely
restrict the quantity of those
alternatives that might reduce
aviation’s impact on climate.
In a study on
imported oil and
U.S. national
security, RAND
researchers conclude that
attempting to curtail terrorist
financing through measures
affecting the oil market will
not be effective, because
terrorist attacks cost so little to
perpetrate.
A multiyear body
of RAND work was
presented to the U.S.
Senate Committee on Energy
and Natural Resources, outlining
the benefits of enhanced
federal support for research and
technology development directed
at how the United States produces
and uses fossil fuels.
A RAND Europe analysis
is helping environmental
policymakers improve
long-term thinking about complex
environmental issues by refining
the utility of scenario planning in
decisionmaking.
In research
commissioned by
several Chinese
agencies, RAND
found that China can
best spur regional development
and economic growth in China’s
Tianjin municipality, its newest
megalopolis, by focusing on
emerging high-technology
applications, one of which is
green manufacturing.
Investing in People and Ideas
11
Evaluating Options to Mitigate
Conflict & Instability
RAND is renowned for helping policymakers better understand regional conflicts
and providing evidence-based guidance on policies to restore stability. RAND
research in 2009 offered input to the ongoing conflicts in Iraq and Afghanistan,
the declining security situation in Mexico, and a range of other military and
strategic concerns that critically impact security around the world.
F I N D I N G S
The Wars in Iraq and Afghanistan
RAND made several contributions
to U.S. policy considerations for
this troubled region in 2009. The
RAND National Defense Research
Institute released its congressionally
mandated analyses of the timetable
for withdrawal of U.S. forces from
Iraq. These analyses covered logistical
constraints, base closures, the composition of the residual U.S. forces,
and the ability of Iraqi security forces to successfully counter insurgent
activity. A parallel analysis by the RAND Arroyo Center of logistics
capabilities in Southwest Asia led U.S. Central Command to conclude
that a drawdown in Iraq could occur more rapidly than previously
believed. In support of operations in Afghanistan, RAND provided
a series of briefings on Taliban strategy and tactics and its shadow
government to the Marine Corps and throughout the U.S. Intelligence Community. RAND analyst Seth Jones wrote In the Graveyard
of Empires: America’s War in Afghanistan (W.W. Norton), in which he
harnesses important new historical research, thousands of declassified
government documents, and interviews with prominent figures to reveal how the siphoning of resources to Iraq left Afghanistan vulnerable
to a “war of a thousand cuts.” Jones argues for a radically new approach.
Bolstering Mexican Security
Drug violence in Mexico, frequently
centered in border towns, topped
headlines in 2009. Researchers at
RAND, supported by RAND’s
Investment in People and Ideas
program (see page 23), looked at
narco-violence and other issues to
investigate the broader problem of Mexico’s decaying security systems.
Drawing on interviews with a wide range of Mexican and U.S. officials
and nongovernmental experts, as well as other sources, researchers
identified a range of prevalent challenges from human trafficking and
corruption to weapons smuggling and gang violence. But the chief
security threat to the United States from Mexico, they found, is organized crime, which has infiltrated all levels of Mexico’s government and
police forces, and is involved in many illegal activities that are on the
rise. The RAND study points to a historic window of opportunity for
the United States to forge a strategic security partnership with Mexico
that emphasizes reform and long-term institution-building. Study
coauthor Ben Bahney concludes, “The real threat to the United States
is that Mexicans lose their political will for the fight, and the cartels’
organized violence and bribery will permanently subvert Mexican institutions, suppressing real political and economic progress.”
In conflict areas,
effective civilian relief,
reconstruction, and
economic development
work can help convince populations
to support their government against
insurgency. Insurgents know this,
and typically target civilian relief
work in order to weaken the will
to fight. Too often, this results in a
postponement of reconstruction
efforts and/or excessive reliance
on force to defeat insurgents. It
is important to conduct civilian
counterinsurgency where the
population resides and despite the
persistence of violence.
The Afghan National Army
(ANA) is critical to the
stabilization of Afghanistan.
A RAND study assessing
the ANA’s progress in
the areas of recruitment, training,
facilities, and operational capacity
finds that though it has come a long
way since the outset of the current
war, coalition forces will continue
to play a crucial role in the security
of Afghanistan for the foreseeable
future.
RAND’s national security
divisions contributed to the
ongoing U.S. Department
of Defense quadrennial
review of defense strategy
and programs, known as the QDR.
The Army Vice Chief of Staff has
noted that a RAND Arroyo Center
study of the recent experience with
deployments in Iraq and Afghanistan
and the implications for future
deployments was having a major
impact on QDR deliberations.
Large multinational
corporations operating
in violent conflict zones
are often motivated
to engage in typical
counterinsurgency activities to
protect their infrastructure and
personnel. Policymakers looking to
mitigate conflict may be tempted
to leverage ongoing corporate
activities, but should be cautious
given the lack of transparency and
accountability involved.
Investing in People and Ideas
13
Contextualizing the
Global Recession
In the wake of the global economic recession, RAND explored new ideas
for strengthening corporate governance, compliance, and ethics practices;
understanding the spending, saving, and consumer habits of individuals; and
avoiding waste in public expenditures. RAND experts also examined whether
the recession would have lasting geopolitical consequences; and, most
importantly, what policy levers could be identified to avoid future crises.
C O L L A B O R A T I O N S
Mending Holes in the Safety Net
Countries throughout
the world have safety net
programs to assist the
poor. Ensuring that safety
net resources reach the
intended beneficiaries
is vital—not only for
those in need but also for
maintaining government
and public support for
such programs. In 2009,
a RAND Europe project
focused on the impact
of error, fraud, and
corruption (EFC) on the
safety net systems needed
to support some of the world’s most vulnerable individuals and
families. Drawing on work conducted in collaboration with the
World Bank, RAND Europe designed a toolkit to help diagnose
EFC issues in safety net programs, consider options for mitigating
the problem, and improve governance. The diagnostic tools were
piloted in the Ukraine, Kyrgyzstan, and Bangladesh; on the basis
of the study findings, all three countries have since taken steps
to reduce the occurrence of EFC.
Helping Each Other
in Times of Need
A team of researchers at RAND is
tracking the effects of the economic
recession using the American Life
Panel, a nationally representative
longitudinal survey of 2,500
households. Several waves of data
have been collected since the
recession began, which provide a detailed picture of how spending,
housing, employment, retirement savings, and future expectations
are being affected by the financial crisis. A 2009 analysis shows
that one way U.S. households are coping with the global economic
downturn is by offering financial help to family members. The
analysis details patterns of giving and receiving financial help in
response to the economic crisis, and how these patterns vary by
age and income. Among the key findings are that many more
households are giving financial help than receiving it and that help
most frequently flows from parents to children.
RAND is partnering with
the Wharton School of
Business and Dartmouth College to develop and operate the
Financial Literacy Center, an online
resource backed by the latest
empirical data to help Americans
at various stages of their working
lives, including current retirees,
prepare financially for old age.
The RAND Behavioral
Finance Forum hosted
the U.S.–UK Conference on Behavioral
Finance and Public
Policy, which focused on helping
consumers make better financial
decisions. Held in Washington,
D.C., the conference was attended
by members of Congress and their
staffs; academics; members of
the financial industry; and other
policymakers.
In March, RAND convened a conference in
Washington, D.C., on
the role and perspectives of corporate chief ethics and
compliance officers (CECOs) in
helping their organizations detect
and prevent corporate misdeeds.
The conference brought together
CECOs and stakeholders in the
nonprofit sector, academia, and
government.
The Kauffman-RAND
Institute for Entrepreneurship Public
Policy collaborated
with the Indian School
of Business and the LEGATUM
Institute on the first International
Conference on Entrepreneurship.
Held in Hyderabad, India, the
two-day symposium focused on
“Catalysts of Entrepreneurship:
Policies for Growth.” Policymakers,
industry leaders, researchers, and
entrepreneurs presented research
on and discussed policy issues affecting the growth of entrepreneurship in India, with special emphasis on education and the effective
utilization of infrastructure.
Investing in People and Ideas
15
Enriching the Debate
Outreach
A PUBLIC RESOURCE
In 2009, RAND findings and recommendations were published in more than 700
policy reports, journal articles, and research briefs. RAND research is available
for free download from our Web site; more than
4.2 million documents were downloaded in 2009.
RAND also shares research findings widely
through media. More than 4,000 unique
media reports featuring RAND research or
researchers were published or broadcast by
influential media outlets around the world in
2009. RAND researchers also provide informed insight
into current events via published op-ed commentaries.
In 2009, RAND commentaries appeared in outlets such
as CNN.com, FinancialTimes.com, International Herald
Tribune, Shanghai Daily, and the New York Times.
RAND helps provide timely input on
decisions confronting government officials
around the world including policymakers
in Europe and the Middle East, as well as
U.S. officials in the Executive Branch, in Congress,
and at the state and local level. RAND lends analytical
expertise to Capitol Hill lawmakers via expert testimony
and an extensive array of nonpartisan briefings and
meetings. In 2009, RAND experts delivered more than
400 presentations to congressional audiences.
Expanded multimedia offerings in 2009
allowed a broader audience to experience
RAND briefings and expertise. Presentations
of the RAND Congressional Briefing Series, conducted
for a live audience in Washington, D.C., are now
available in streaming video on www.rand.org or
as an audio podcast. RAND on popular sites such
as Facebook, Twitter, and YouTube helped policy
observers discover and share RAND research findings.
16
Investing in People and Ideas
DELIVERING INSIGHT
Each year, RAND experts make hundreds of
presentations to decisionmakers and thought leaders
on issues of local, national, and global concern.
A selection of 2009 presentations includes
President Obama and the Middle East:
Challenges for the New Administration
Greenhouse Gas Reduction: What Constitutes an
Effective Cap-and-Trade Program?
Relationship Between Financial Literacy and
Individuals’ Investment Decisions
Civilian Earnings of Reservists Following Deployment
North Korean Power: Myths and Realities
Public Safety in Los Angeles
Getting Health Care Where you Shop: Do Retail
Medical Clinics Offer Comparable Care?
Revitalizing the Transatlantic Security Partnership
Imported Oil and U.S. National Security
Equal Opportunity Entrepreneurship
The H1N1 Pandemic and Investments to Improve
Community Readiness
Cybersecurity and Human Behavior
New Directions for U.S. Drug Policy
CONVENING THOUGHT LEADERS
In 2009, RAND cohosted the Leadership for Health
Summit, the first conference of African First Ladies held
in the United States. The summit brought together 13
First Ladies along with seven country delegations to discuss ideas and strategies for improving the health and
education of Africa’s women and girls. RAND researchers provided expertise to frame discussions around
HIV/AIDS, maternal and child health, and education.
As the social landscape in Africa improves with regard
to women’s issues, RAND is launching the African First
Ladies initiative to demonstrate the role research and
analysis can play in informing public policy.
The RAND Center for Middle East Public Policy (CMEPP)
convened two conferences in 2009 to address challenges in Afghanistan. The first, held in Vienna, included
leading analysts from Afghanistan, China, Denmark,
India, Iran, Pakistan, Russia, the United States, and the
European Union, as well as representatives of nongovernmental and private-sector organizations. Called
Nation-Building and the Futures of Afghanistan: An Examination of Alternative Outcomes and Policies from a
Regional and International Perspective, the conference
was cohosted with the Royal Danish Defence College
and the Austrian Ministry for European and International
Affairs. The Washington, D.C., meeting, held on Capitol
Hill, brought together more than 250 policy experts,
government officials, and journalists for a discussion of assumptions and alternatives for U.S. policy in
Afghanistan. Former National Security Advisor Zbigniew
Brzezinski, Ambassador Zalmay Khalilzad, Senator Carl
Levin, and Ambassador James Dobbins and Brian Michael Jenkins, both of RAND, led a distinguished roster
of speakers in addressing topics such as military troop
levels needed to support a counterinsurgency strategy,
the role of Afghan security forces, and potential costs of
increased military operations.
During the lead-up to the G-20 summit in Pittsburgh,
RAND researchers helped inform media and policy observers on top summit agenda issues. At a conference
on summit outcomes coordinated by RAND, the World
Affairs Council of Pittsburgh, and research centers
at Carnegie Mellon University and the University
of Pittsburgh, Andrew Weiss, director of the RAND
Center for Russia and Eurasia, spoke about the
changing geopolitics of energy. Ambassador James Dobbins, director of the RAND International Security and Defense Policy Center, participated in a separate educational
forum during which he discussed the impact of the wars in
Iraq and Afghanistan on the world economy and the challenges in implementing economic assistance programs in
those regions.
In 2009, RAND Europe cosponsored the first cross-party
debate on UK science policy involving all three mainstream
British political parties. RAND Europe President Jonathan Grant joined Lord Drayson, Minister for Science and
Innovation; Conservative spokesman Adam Afriyie; and
the Liberal Democrats’ Evan Harris on a panel discussion
covering topics such as research funding, independent
scientific advice, and the central role of science to the
economy. Grant drew on RAND Europe’s experience
evaluating scientific research and providing evidence
to inform science and technology policymaking across
the European Union (EU). RAND Europe also convened
representatives from the European Commission, EU, and
private and charitable sectors in Brussels to hear from Carl
Bildt, Sweden’s Minister for Foreign Affairs, on European
foreign relations following the rotation of the EU presidency
to Sweden in July.
The RAND-Qatar Policy Institute was a partner to the World
Innovation Summit for Education (WISE) in Doha, Qatar,
organized by the Qatar Foundation under the leadership
of Her Highness Sheikha Mozah Bint Nasser Al Missned.
RAND researchers joined hundreds of education experts
from around the world to address issues of sustainability,
pluralism, and innovation in education policy.
Investing in People and Ideas
17
The Key to Our Success
Our People
DIVERSITy
LEADERSHIP
Diversity at RAND promotes creativity, deepens
understanding of the practical effects of policy, and
ensures multiple viewpoints and perspectives.
RAND senior management guides and supports staff
as they carry out our mission to help improve policy and
decisionmaking through research and analysis.
Approximately 1,600 people
work at RAND from one of nine
office locations around the
world. Our staff is diverse in work experience
and academic training; political and ideological
outlook; and race, gender, and ethnicity.
James A. Thomson
Eugene C. Gritton
President and
Chief Executive Officer
Vice President, RAND National
Security Research Division
Michael D. Rich
Director, RAND National Defense
Research Institute
á
Executive Vice President
Vivian J. Arterbery
Corporate Secretary
Tackling complex policy issues
requires multiple disciplines and
experiences. RAND researchers
hold advanced degrees in political
science and international relations; economics;
behavioral science; engineering; law and
business; math, operations research, and
statistics; policy analysis; life sciences; social
sciences; arts and letters; physical sciences;
and computer sciences.
á
With more than 50 nationalities
represented by RAND
staff, many of our people
are multilingual. Languages spoken include
Spanish, French, Chinese, Arabic, Russian,
German, Korean, and Japanese.
RAND’s focus is global: Our staff
are committed to helping people
and societies throughout the world
be safer, healthier, and more
prosperous.
Karen Treverton
Special Assistant,
President’s Office
Andrew R. Hoehn
Vice President and Director,
RAND Project AIR FORCE
Patrick Horrigan
Vice President, Office of Services
Jeffrey Isaacson
Director, RAND Education
Vice President and Director,
RAND Arroyo Center
(military leave)
Timothy M. Bonds
Arie Kapteyn
Susan Bodilly
Acting Director,
RAND Arroyo Center
Director, RAND Labor and
Population
Robert H. Brook
Debra Knopman
Vice President and Director,
RAND Health
Lynn Davis
Director, Washington Office
Jim Dertouzos
Director, RAND Institute for
Civil Justice
Susan Everingham
Director, Pittsburgh Office
Vice President and Director,
RAND Infrastructure, Safety,
and Environment
Lindsey C. Kozberg
Vice President for External Affairs
Susan L. Marquis
Dean, Pardee
RAND Graduate School
Bruce Nardulli
Richard Fallon
Director,
RAND-Qatar Policy Institute
Vice President and
Chief Financial Officer
Adele R. Palmer
Jonathan Grant
Vice President, Staff Development
and Management Office
President, RAND Europe
AS OF DECEMBER 20 09
á
18
Investing in People and Ideas
ExCELLENCE
President’s Awards recognize RAND staff who have made outstanding contributions to the RAND community while
exemplifying our core values of quality and objectivity. Made possible by the generosity of donors to the RAND Policy
Circle, the awards provide staff with research time and support to pursue activities related to career development or
exploratory research.
John Birkler, senior management systems analyst and
manager of Maritime Programs in the RAND National
Security Research Division, for his intellectual leadership
of RAND’s research program for the Office of the
Secretary of Defense, the U.S. Navy, the U.S. special
operations community, and foreign defense ministries
on issues involving the modernization and operation of
naval forces.
Dennis Flieder, associate director of Contract and Grant
Services, for the professionalism and integrity with which
he assists in establishing new collaborative relationships
between RAND and other organizations and for his
commitment to the training and skill development of
RAND’s contract administrators.
Krishna Kumar, senior economist and professor of
economic development and leader of the Rosenfeld
Program on Asian Development at the Pardee RAND
Graduate School, for his multifaceted efforts to
strengthen RAND’s expertise on and presence in Asia,
through both his research and entrepreneurial activities,
and his commitment to strengthening the international
curriculum of the Pardee RAND Graduate School.
Joy Moini, senior project associate, for the full range
of her contributions during her three and a half years
in RAND’s Doha office, especially her many varied
research projects, her initiative and effectiveness in
advancing RAND’s capacity-building programs, and her
skill at representing RAND in new settings.
Melinda Moore, senior natural scientist, for her creative
research on effective preparedness planning for
pandemics around the world, including in the Mekong
Delta Basin in Southeast Asia, the Middle East, and the
United States, and for her efforts on behalf of RAND’s
preparations for H1N1 influenza.
Rosalie Pacula, senior economist; codirector of the RAND
Drug Policy Research Center; acting director of RAND
Health’s Economics, Finance, and Organization program;
and professor of health economics at the Pardee RAND
Graduate School, for her influential research on the global
drug market, the economic cost of methamphetamine
use, and the legalization of marijuana and for her skill at
disseminating research findings to both policymakers and
the general public.
Michael Rayfield, program manager for Information
Services and Technology, for developing and
implementing the continuous improvement program within
the Office of Services, which has led to improvements
in both effectiveness and efficiency at RAND, as well as
adoption by other institutions.
Jennifer Rubin, director for Emerging Areas, RAND
Europe, for her sustained and successful entrepreneurship
in developing new research areas for RAND Europe, such
as pan-European collaboration in comparative criminal
justice and assessing interventions to reduce crime and
violence in Europe; for her delivery of high-impact and
high-quality research on a broad range of policy issues;
and for her recruitment of outstanding analysts.
Gery Ryan, senior behavioral scientist and professor of
political and social science, qualitative research, and
public policy analysis at the Pardee RAND Graduate
School, for his many contributions to both the school
and RAND’s international research agenda, including,
especially, his innovative leadership of the internal
reaccreditation task force; his research on education
reform in Qatar; and his initiative in helping to launch
the Leadership for Health Summit, the first conference of
African First Ladies held in the United States.
Investing in People and Ideas
19
The Next Generation of Policy Leaders
Educational
Opportunities
PARDEE RAND GRADUATE SCHOOL
The Pardee RAND Graduate School (PRGS) is the world’s leading producer of
Ph.D.’s in public policy analysis.
PRGS is unique in American higher education. The school is colocated at
RAND’s headquarters campus in Santa Monica, California; and its graduate
students are given the rare opportunity to study at one of the world’s most
prestigious policy research institutions while working on current RAND
projects alongside top policy thinkers. In this way, PRGS students get to be
part of an intellectual community that doesn’t just write about problems but
actually helps government and other decisionmakers solve those problems.
In 2009, PRGS students contributed to RAND projects that are addressing
topics such as health care reform, climate change, immigration, national
security planning, and international development.
PRGS students are highly accomplished and come to the school with a range
of different educational backgrounds and a passion for public service. In
the fall of 2009, PRGS welcomed 22 new students, from the United States,
Canada, China, Korea, Nepal, Togo, and Turkey.
For the first time, all entering students in 2009 are scholarship recipients.
PRGS is working to provide full scholarships for all first-year students and partial scholarships for all second-year
students to ensure that each PRGS student can graduate with minimal debt and be able to pursue a public service career.
Additionally, thanks to the generosity of PRGS board members, friends, and alumni, PRGS was able—as part of its
annual dissertation award competition—to award nearly $394,000 in dissertation grants to more than 20 students on
dissertation status.
E A R Ly C A R E E R R E S E A R C H A W A R D R E C I P I E N T
PRGS student Meena Fernandes recently received the Judy K. Black Early
Career Research Award from the American Academy of Health Behavior
(AAHB). The award recognizes innovative, rigorous early-career health
behavior research that makes an important contribution to science
or practice. The selection was based on her paper, “The Role of School
Physical Activity Programs in Child Obesity Trajectory,” coauthored with
senior economist and PRGS faculty member Roland Sturm. The award was presented
in March at the AAHB’s annual conference in Hilton Head, South Carolina, during
which Fernandes shared her findings.
20
Investing in People and Ideas
POSTDOCTORAL & PROfESSIONAL PROGRAmS
RAND partners with several leading universities to offer health- and
health care–related programs for postdoctoral students. Physicians at the
Robert Wood Johnson Clinical Scholars Program at UCLA collaborate on
research projects with leading RAND Health researchers. RAND Health also
sponsors a program with the UCLA School of Public Health to offer training
in health services research methods and policy analysis. Participants in the
RAND–University of Pittsburgh Scholars Program work on health services
research and health policy–related projects with a multidisciplinary group of
experienced faculty mentors from RAND Health, the University of Pittsburgh,
and affiliated research units.
Through the Military Fellows Program, active-duty service members from
the Army, Navy, Marine Corps, Coast Guard, and Air Force are stationed
at RAND for a year to participate in studies and other activities to advance
their understanding of analytical policy research. Each year, the U.S.
Department of Homeland Security (DHS) and RAND select a senior DHS
analyst to work on critical issues through the DHS Fellowship Program.
New Security Challenges, offered by PRGS, is an intensive course that
equips participants with an understanding of the most critical current
policy challenges in the areas of security and defense and the most upto-date analytical techniques for addressing them. RAND is also one of
the participating institutions in the Transatlantic Postdoctoral Fellowship
for International Relations and Security, which engages recent doctoral
students in social and political science to work on cutting-edge topics as
part of an intensive rotational tour through three leading research institutes
on both sides of the Atlantic. The Nuclear Security Fellows Program,
announced in 2009 and sponsored by the Stanton Foundation, will bring
scholars to RAND to conduct interdisciplinary, policy-relevant research that
advances understanding of issues related to nuclear security.
RAND convenes two annual conferences on aging sponsored by the
National Institute on Aging and the National Institutes of Health Office of
Behavioral and Social Sciences Research. Known collectively as the RAND
Summer Institute, the conferences include a Mini-Medical School for Social
Scientists and a workshop on Demography, Economics, and Epidemiology
of Aging. The sessions address biology, genetics, patient care, psychiatry,
and other areas to help non–medically trained scholars whose research
relates to the aging process and the medical treatment of the elderly better
understand how medicine can inform and improve social science research.
RAND Labor and Population also offers a Postdoctoral Training Program
in the Study of Aging for outstanding junior scholars in demographic and
aging research.
SUmmER ASSOCIATES
For more than 50 years, a select group of
outstanding graduate students from around
the world has been invited to RAND for an
intensive mentorship experience working
with RAND senior staff. Summer associates
have gone on to become influential thought
leaders in government, the private sector,
and academia. A sample of summer
associate research projects in 2009 includes
development of an “earlywarning” program for the U.S.
National Intelligence Council
a study examining whether
built and social characteristics
of neighborhoods predict the
development of cardiovascular
disease in women
an analysis of the
complex relationships
among drug use,
criminal activity, and the criminal
justice system
an assessment of the
institutional and operational
capacity of several African
armies
an examination of the patterns
of technology diffusion
and their consequences for
health costs, outcomes, and disparities
an exploration of the theoretical
foundations for arms control
in the 21st century in support
of the U.S. Air Force’s
engagement in potential arms-control
negotiations with Russia and other states
Investing in People and Ideas
21
Philanthropy at RAND
An Investment in
People and Ideas
mAKING A DIffERENCE
Philanthropic support is vital to RAND and has made possible some of RAND’s most visionary work.
Through generous contributions of financial resources and the volunteer leadership of distinguished advisors,
RAND is able to
•
attract top intellectual talent from around the world and support their efforts to address complex
matters for the public good; and
•
develop new, innovative ideas for addressing critical, but often underappreciated policy areas.
RAND is grateful to the individuals, corporations, and foundations that make gifts of financial support and
lend us their wisdom and expertise as members of RAND advisory boards and the RAND Policy Circle. Their
generosity has helped to grow RAND as an enterprise that is simultaneously broad in scope, multidisciplinary
in approach, international in reach, and unparalleled in quality. And at a time when creative, crosscutting solutions to complex challenges are needed most—yet resources for generating innovative ideas are increasingly
hard to come by—RAND’s philanthropic supporters enable RAND to continue to take on the biggest questions, apply the long view, and attract and engage the most talented individuals to be a part of that effort.
WHy PEOPLE SUPPORT OUR WORK
Public policy need not be inaccessible. It is about real people,
real places, real organizations, real solutions. It is work that
seeks to have a lasting, positive effect on you, your family,
your community, and the world.
22
Investing in People and Ideas
SUPPORTING TALENT
The world watched in late 2008 as terrorist
attacks unfolded across Mumbai, India.
Flexible funds enabled a team of experienced
RAND terrorism experts to set to work
immediately to assess the distinguishing and novel
features of the Mumbai attacks and the implications of
those attacks for the United States, India, and Pakistan.
The resulting RAND study, The Lessons of Mumbai, was
published in early 2009.
The annual Rockwell Policy Analysis
Prize, made possible through a generous
philanthropic donation from RAND alumnus
Marshall (Tom) Rockwell, was awarded in 2009
to Angel Rabasa to explore disengagement and
deradicalization of Islamist extremists. Rabasa will use the
prize funding to identify and analyze the processes through
which militants leave Islamist extremist groups, assess
the effectiveness of certain deradicalization programs,
and evaluate policies to help promote and accelerate
deradicalization.
EXTRE
In 2009, RAND also launched an effort to create an
endowed scholarship in the Pardee RAND Graduate
School to support the studies and research activities
of an incoming graduate fellow from a former Soviet
state. The scholarship will honor the late Jeremy
Azrael—under whose leadership the RAND Business
Leaders Forum helped Russian, European, and North
American corporate executives and political figures
understand opportunities for and challenges
to economic growth in the 21st century.
Philanthropic contributions were essential
to the COMPARE initiative—RAND’s
multiyear, multimillion dollar effort to bring
fact-based analysis to the complex debate over U.S. health
care reform. Dozens of RAND researchers from a variety
of disciplines worked together over several years to create
the microsimulation model that enables analyses of the
impact of a variety of proposed policies. Through extensive
outreach, COMPARE is helping policymakers make critical
decisions that will determine who has access to care, the
quality of that care, and the management of costs.
M
In 2009, philanthropic support from The Korea
Foundation and other donors helped launch an
initiative to establish a Korea Policy Chair at RAND.
The Korea Policy Chair will bring heightened visibility
and impact to RAND’s research on Korean domestic,
foreign policy, and security issues, and also support
a program of activities at RAND aimed at promoting
mutual understanding and cooperation between
Korea and the United States.
Philanthropic contributions, combined with earnings from
RAND’s endowment, make possible RAND’s Investment
in People and Ideas program, which is used to support
innovative research on issues crucial to the policy debate
but that reach beyond the boundaries of traditional client
funding. Projects currently being funded by this program
include analysis of climate change geo-engineering;
rethinking disposal of nuclear waste; health systems for the
21st century; counterinsurgency in Pakistan’s tribal areas;
revitalizing the Middle East peace process; and public
education in America’s cities.
IS
RAND uses philanthropy to support Distinguished
Chairs for outstanding researchers recognized as
world-class among peers. Distinguished Chairs
conduct innovative research, outreach, and mentoring
of junior policy analysts. Also made possible by
philanthropic support, RAND President’s Awards
provide outstanding staff with time to pursue
exploratory research and career development
activities (see page 19 for a list of 2009 recipients).
RAND corporate fellows are individuals who have
completed distinguished government or other policy
analysis service and, as a result of philanthropic
support, are available to devote a portion of their time
to RAND research activities.
INSPIRING IDEAS
Investing in People and Ideas
23
Inside the Policy Circle
The RAND Policy Circle is a group of philanthropic
individuals who share RAND’s dedication to public
policy research that is objective, analytical, and
nonpartisan. Members regularly interact with RAND’s
leading experts through special events, roundtable
discussions, conference calls, and more. Concerns
of Policy Circle members are, like RAND’s research
agenda, wide in scope. What unites them is their
commitment to making a difference by investing in
RAND’s people and ideas.
24
Investing in People and Ideas
Investing in People and Ideas
25
Policy Circle
RAND gratefully acknowledges gifts made by the following donors during calendar year 2009.
Visionary
$1,000,000+
The Martin Foundation
The Port Authority of New York
and New Jersey
Port of Los Angeles
The SahanDaywi Foundation
Breakthrough
$500,000–$999,999
Siguler Guff & Company
Y & S Nazarian Family
Foundation
Wal-Mart Stores, Inc.
Anne and James F. Rothenberg
Leadership
$100,000–$499,999
Anonymous
His Excellency Dr. Omar Bin
Abdul Muniem Al Zawawi
Allstate Insurance Company
William F. Benter
Chartis
ExxonMobil Corporation
Juridica Investments Ltd.
Korea Foundation
Bonnie McElveen-Hunter
Pfizer Inc
Risk Management Solutions,
Inc.
Tom and Laura Rockwell
Maxine and Eugene S.
Rosenfeld
State Farm Insurance
Takeda Pharmaceuticals North
America, Inc.
Leland R. Speed
Theresa and Charles Wolf, Jr.
Lawrence Zicklin
Trailblazer
$25,000–$49,999
Anonymous
Richard A. Abdoo
American Association for
Justice
Chris Andersen
Neal Baer
Marcia Bird
Daniel M. Bradbury
Business Roundtable
Jane Cavalier
Robert A. Clifford
Coalition for Litigation Justice,
Inc.
Communities Foundation of
Texas
Steven Lazarus
Charles Lifland
Frank Litvack
William R. Loomis, Jr.
Los Angeles Police Foundation
Miami-Dade Police Department
Santiago Morales
Munich Re
New York State Office of
Children and Family Services
O’Melveny & Myers LLP
Frederick S. Pardee
California Community
Foundation
Capital Research and
Management Company
Marcia and Frank C. Carlucci
CERA
Chicago Police Department
Civil Justice Reform Group
Crane Co.
DuPont
Thomas Epley and Linnae
Anderson
FMC Corporation
Robert and Kelley Petkun
Garrison Litigation
Management Group
Paul M. Pohl
General Electric Co.
Anthony N. Pritzker
Georgia-Pacific
William Recker
Ellen Hancock
James E. and Sharon C. Rohr
Frank Holder
John J. Rydzewski
Karen Elliott House
Leonard D. Schaeffer
Lucille Ellis Simon Foundation
The Robert and Ardis James
Foundation
Robert Simonds
Koret Foundation
David Singer
Lindsey C. Kozberg
Douglas J. Smith
Arthur and Marylin Levitt
Kenin M. Spivak
Los Angeles County Sheriff’s
Department
Michael Critelli
State of Missouri Department of
Social Services
Janet Crown
Joseph P. and Carol Z. Sullivan
Munger, Tolles & Olson LLP
The Doctors Company
Suzanne S. and Michael E.
Tennenbaum
Robert B. Oehler
Thomas Lord Charitable Trust
Paul H. and Nancy J. O’Neill
ValueOptions, Inc.
William A. Owens
Jacques E. Dubois
Dana G. Mead
Jane and Ronald L. Olson
Explorer
$50,000–$99,999
The Family Connection
Partnership, Inc.
Anonymous
Kenneth R. Feinberg
Enzo Viscusi, ENI
Owens-Illinois, Inc.
Michael W. Ferro, Jr.
Vital Projects Fund Inc.
Patricia Salas Pineda
Ally Foundation
Arnie Fishman
David I. J. Wang
Paul D. Rheingold
The Harold and Colene Brown
Family Foundation
Fortum Corporation
Warburg Pincus LLC
Donald B. and Susan F. Rice
The Fred Rogers Company
Westfield Corporation, Inc.
RPM International Inc.
John M. Cazier
The Funari Family Foundation
John A. Wright
Saint-Gobain Corporation
The Chubb Corporation
A. Frederick Gerstell
Robert C. Wright
Selvyn Seidel
The Dow Chemical Company
Goldman Sachs
Daniel Yun
Irvin Stern Foundation
Mary Kay and James D. Farley
Grantmakers for Children,
Youth & Families
Alcoa Inc.
Gerald Greenwald
Pathfinder
$10,000–$24,999
The Hauser Foundation
Kip and Mary Ann Hagopian
Robert J. Abernethy
Jen-Hsun and Lori Huang
Hands on Gulf Coast
S. Ward Atterbury
JL Foundation
Leslie Hill
Paul and Evelyn Baran
Karen L. Katen
Benny T. Hu
Gurminder S. Bedi
Liberty Mutual Insurance
Companies
Susan Hullin
The Sheri and Les Biller Family
Foundation
Farmers Insurance Group/
Zurich U.S.
James B. Lovelace
Maiden Re
Merck & Co., Inc.
Ray R. Irani
Suzanne Nora Johnson
Spencer H. Kim
Bud and Betsy Knapp
Joseph and Mirit Konowiecki
26
Kraft Foods, Inc.
Investing in People and Ideas
Darlene and James A.
Thomson
The Gail and Lois Warden Fund
Roberta Weintraub and Ira
Krinsky
Groundbreaker
$5,000–$9,999
Anonymous
Donna C. Boehme
Odeh F. Aburdene
Brad D. Brian
Mark Benjamin/Morley Builders
Burford Advisors LLC
Margery A. Colloff
James A. Greer
Roy A. Hunt Foundation
Palmer G. Jackson
Paul G. Kaminski
Thomas L. McNaugher
Donna and H. Norman
Saurage, III
Daniel and Marcy Schlessinger
Michael I. Schneider
Gerald J. Sullivan
Donald Tang
Robert and Marjorie Templeton
Charles J. Zwick
Glenn and Jack Ellis
Ed and Connie Engler
Innovator
$1,000–$4,999
Karen Wolk Feinstein, Jewish
Healthcare Foundation of
Pittsburgh
Ellen Palevsky
Malcolm A. Palmatier
Legacy gifts were received
from the following
Anonymous
Kara Fox
Kathleen Flynn Peterson
David G. Adishian
Estate of William B. Graham
Mr. and Mrs. H. M. Goern
Arnold Porath
Robert and Peggy Alspaugh
Eugene C. and Gwendolyn O.
Gritton
Michael K. Powell
Yılmaz Argüden, ARGE A.S.
Mr. and Mrs. David J.
Armstrong
Daniel Grunfeld
Vincent Autiero/Westwood
College
Fred Hayman Family
Foundation
Wally Baker, Green Tech
Foundation
The Hillman Company
Eleanor and Max H. Baril
Barbara Barrett
Alan R. Batkin
Maurine Bernstein
Nancy Block Reid
John Handy
Richard Hundley
William and Janet Hunt
IBEW Local Union No. 5
John J. Kallenborn
Matthew D. Kanin
Bill and Pamela Bohnert
Sabrina Kay Charitable
Foundation
Lynn A. Booth
John M. Keane
Louis L. Borick
Lydia Kennard
Brent and Linda Bradley
Sarah Ketterer
Robert H. Brandow
G. Edward Bryan
Fred Kipperman and Hien
Nguyen
Waldo and Jean Burnside
David M. Konheim
Frank V. Cahouet
Rini and Arthur D. Kraus
Robin and Albert Carnesale
Karen J. Kubin
Louis M. and Jane Castruccio,
Castruccio Family Foundation
Laborer’s District Council of
Western Pennsylvania
Sara Muller-Chernoff and
Dennis Chernoff
Philip Lader
Gordon B. Crary
Anne Lewis
Natalie W. Crawford
Diana and J. Thomas Lewis
Richard J. and Mildred M.
Cross
Leon S. Loeb, Ph.D.
Greg and Simin Curtis
Richard Danzig
Kate Dewey, McCrory &
McDowell
Sherry Lansing
John Lu
Raymond E. Mabus, Jr.
Linda G. Martin
Michael M. May
Mary Jane Digby
Alden J. McDonald, Jr.
Ann Dugan, Institute for
Entrepreneurial Excellence
G. G. Michelson
Bobbi Elliott
Lloyd and Mary Morrisett
Eugene and Ruth Ellis
Edward R. Muller and Patricia
E. Bauer
Joel R. Mogy
Vicki Reynolds Pepper and
Murray Pepper
Debra Granfield and Michael
D. Rich
Stephen G. Robinson, Donald
& Sylvia Robinson Family
Foundation
Daniel Rose
Matching Gifts gifts were
received from the following
AK Steel Foundation
The Intermec Foundation
Merrill Lynch & Co. Foundation,
Inc.
The Morrison & Foerster
Foundation
Louis N. Rowell
State Farm Companies
Foundation
Henry and Beverly Rowen
Unihealth Foundation
Stanley M. Rumbough
Charles A. Schliebs
Margaret Schumacher
Michael Segal, Fred Segal
Santa Monica
Donald W. Seldin
Dorothy R. Sherwood
The Sikand Foundation, Inc.
The H. Russell Smith
Foundation
Mr. and Mrs. Joseph E. Smith
Will Steger
Jeanne C. Thayer
Christine J. Toretti
Karen and Gregory F. Treverton
Roberta and Terry Turkat
John and Andrea Van de Kamp
Tracy and Hui Wang
Willis H. Ware
Jeffrey and Winnie Wasserman
Betsy A. Way
Glenn and Judy Weirick
James Q. Wilson
Arthur Winter
Linda Tsao Yang
Gifts were given in memory
of the following
Mary Anderson
John Autiero
Jeremy R. Azrael
Anne Boren
Don Emerson
Lawrence Fisher
Nena Flournoy
William B. Graham
Elwyn Harris
Larry Hill
Patricia Kirkwood
Kevin N. Lewis
Gus Shubert
Susan Way-Smith
Al Williams
Gifts were given in honor of
the following
The Bruck Family
Bob Petkun
Jennie Buchanan and Tyler
Kennedy
Investing in People and Ideas
27
RAND Advisory Boards
Members of RAND advisory boards enrich RAND by adding their diverse experience,
perspective, and knowledge to our efforts to improve public policy. Our advisory boards
include distinguished individuals in the public and private sectors who have demonstrated
leadership and a commitment to transcending partisan conflicts and political ideologies. Their
balanced input helps us achieve our mission to help improve policy and decisionmaking
through research and analysis.
Pardee RAND Graduate School Board of Governors
Jane Cavalier
Robert E. Grady
Santiago Morales
Founder and Chief Executive Officer,
BrightMark Corporate Directioning
and Brand Consulting
Managing Director, The Carlyle
Group; Member, AuthenTec Board
of Directors
President, Maxiforce Inc.
Don R. Conlan
Pedro José Greer, Jr., M.D.
Retired President, The Capital
Group Companies
Assistant Dean of Academic Affairs,
Florida International University
College of Medicine
Eugene S. Rosenfeld
Daniel Grunfeld
Partner, Kaye Scholer LLP
Senior Operating Partner, Atlas
Holdings, LLC
President and Chief Executive
Officer, Agensys, Inc.; Former U.S.
Secretary of the Air Force; Trustee,
RAND Corporation
Partner, Vance Street Capital
LLC; Chief Executive Officer,
Semicoa Corporation; Chairman,
Secure Communication Systems
Corporation; Chairman, Micross
Components Corporation
B. Kipling Hagopian
Faye Wattleton
Managing Partner, Apple Oaks
Partners, LLC
President, Center for the
Advancement of Women
Gurminder S. Bedi
Francis Fukuyama
Lydia H. Kennard
James Q. Wilson
Thomas E. Epley
Donald B. Rice (Chair)
Retired Vice President, Ford North
America Truck
Kakha Bendukidze
Founder, Knowledge Fund
Michael J. Boskin
Senior Fellow, Hoover Institution;
T.M. Friedman Professor
of Economics, Stanford
University
Bernard L. Schwartz Professor
of International Political
Economy, Paul H. Nitze School
of Advanced International Studies,
Johns Hopkins University; Trustee,
RAND Corporation
Former Executive Director, Los
Angeles World Airports; Trustee,
RAND Corporation
James B. Lovelace
Francisco Gil Díaz
Director, Capital Group Companies,
Inc.; Senior Vice President, Capital
Research Global Investors
Chief Executive Officer, Telefónica
Moviles Mexico S.A. de C.V.
Dana G. Mead
Chairman, The MIT Corporation
Frederick S. Pardee
Investor
President, ForestLane Group
David I. J. Wang
Senior Fellow, Clough Center for the
Study of Constitutional Democracy,
Boston College
Ex OFFICIO
James A. Thomson
President and Chief Executive
Officer, RAND Corporation
AS OF DECEMBER 20 09
Promising Practices Network on Children, Families and Communities Board of Advisors
James A. Thomson (Chair)
Bill Dent
Nancy Martinez
Mark Real
President and Chief Executive
Officer, RAND Corporation
Manager, Missouri Community
Partnerships; Staff Director, The
Family and Community Trust
Director, Strategic Planning and
Policy Development, New York
State Office of Children and Family
Services
President and Chief Executive
Officer, KidsOhio.org
Gary Brunk
President and Chief Executive
Officer, Kansas Action for Children
Shannon Cotsoradis
Executive Vice President and Chief
Operating Officer, Kansas Action for
Children
Catherine Gautier
Executive Director, Hands On Gulf
Coast
Stephanie McGenceyWashington
William H. Isler
Executive Director, Grantmakers
for Children, Youth and Families
Executive Director, Family
Communications, Inc.
Susan Mitchell-Herzfeld
Director, Bureau of Evaluation and
Research, New York State Office of
Children and Family Services
28
Investing in People and Ideas
Gaye Morris Smith
Executive Director, Georgia Family
Connection Partnership
AS OF DECEMBER 20 09
RAND Center for Asia Pacific Policy Advisory Board
Chris Andersen
Partner, G. C. Andersen Partners,
LLC
Chey Tae-wan
Chairman and Chief Executive
Officer, SK Holdings Company Ltd.
Roy Doumani
Professor, Molecular and Medical
Pharmacology, University of
California, Los Angeles
Lalita D. Gupte
Chair, ICICI Venture Funds
Management Co. Ltd
Benny T. Hu
Chairman, CDIB BioScience Venture
Management, Inc.
Wyatt R. Hume
Provost, United Arab Emirates
University
Jianzhong Zhuang
Professor and Vice Director,
Shanghai Jiao Tong University
Robert Oehler
Donald Tang
Daniel Yun
President and Chief Executive
Officer, Pacific Alliance Bank
Chief Executive Officer, CITIC
Securities International Partners;
Trustee, RAND Corporation
Managing Partner and Founder,
Belstar Group
Michael Tang
Ex OFFICIO
Chief Executive Officer, National
Material L.P.
James A. Thomson
William Owens
Chairman, CBOL Corporation
Chairman and Chief Executive
Officer, AEA Holdings Asia
N. Jay Liang
Anthony N. Pritzker
Spencer Kim
President and Chief Executive
Officer, Etech Securities, Inc.
President and Chief Executive
Officer, The Pritzker Company
William R. Loomis, Jr.
Eugene S. Rosenfeld
Michael Tennenbaum
President and Chief Executive
Officer, RAND Corporation
Senior Managing Partner,
Tennenbaum Capital Partners, LLC
Robin Meili
Corporate Financial Advisor
President, ForestLane Group
Marsha Vande-Berg
Director, International Programs,
RAND Corporation
Ming Hsieh
Leonard Sands
Chief Executive Officer, Pacific
Pension Institute
Thomas McNaugher
Chairman, President, and Chief
Executive Officer, Cogent, Inc.
Founding Partner and Chairman,
Alchemy Worldwide
Mong-Joon Chung
George Siguler
Member of the National Assembly,
The Republic of Korea
Managing Director, Siguler Guff &
Company
Edward Wanandi
Director, RAND Center for Asia
Pacific Policy, RAND Corporation
Chief Executive Officer,
International Merchants, LLC
AS OF DECEMBER 20 09
Linda Tsao Yang
Chairman, Asian Corporate
Governance Association
RAND Center for Corporate Ethics and Governance Advisory Board
Larry Zicklin (Chair)
Robert Deutschman
Matthew Lepore
Kenin Spivak
Clinical Professor of Business
Ethics, Leonard N. Stern
School of Business, New York
University
President, Cappello Partners, LLC
Vice President, Chief Counsel—
Corporate Governance, and
Assistant General Counsel,
Pfizer Inc
Chairman and Chief Executive
Officer, Spivak Management Inc.
Jeff Gearhart
Donna Boehme
Executive Vice President and
General Counsel, Wal-Mart
Stores, Inc.
Principal, Compliance Strategists
LLC
Jeanine Jiganti
Lovida H. Coleman, Jr.
Partner, Sutherland,
Asbill & Brennan LLP
Vice President, Chief
Compliance Officer, Takeda
Pharmaceuticals
Richard Thornburgh
Former Chairman, U.S. Securities
and Exchange Commission
Former Attorney General and
Governor, Commonwealth of
Pennsylvania; General Counsel,
Kirkpatrick & Lockhart LLP
Bradley Lucido
Lynne Yowell
Chief Compliance Officer,
MassMutual Financial Group
Associate General Counsel,
State Farm Insurance
Arthur Levitt
AS OF DECEMBER 20 09
Investing in People and Ideas
29
RAND Advisory Boards
RAND Center for Global Risk and Security Advisory Board
Harold Brown (Chair)
Albert Carnesale
Henry Kissinger
Ronald Simms
Counselor, Center for Strategic
and International Studies; Former
U.S. Secretary of Defense; Trustee
Emeritus, RAND Corporation
Former Chancellor, University of
California, Los Angeles
Former U.S. Secretary of State
Carl Covitz
Chief Executive Officer and
President, Talwood Corporation
President, Simms Commercial
Development; Vice President and
Treasurer, The Simms/Mann Family
Foundation
Robert Abernethy
President and Chief Executive
Officer, Landmark Capital
President, American Standard
Development Co.
Jacques Dubois
Cleon “Bud” T. Knapp
Peter Norton
President, Norton Family Office
Former Chairman, Swiss Re America
Holding Corporation
Robert Simonds
Chairman, The Robert Simonds
Company
AS OF DECEMBER 20 09
RAND Center for Health and Safety in the Workplace Advisory Board
Christine Baker
Cameron Mustard
Ken Wengert
Executive Officer, California
Commission on Health and Safety
and Workers’ Compensation
President, Institute for Work and
Health
Safety Director, Kraft Inc.
John Howard, M.D.
Jeff Shockey
Director, Safety and Regional
Services, Alcoa
Senior Vice President, ORC
Worldwide
Director, National Institute for
Occupational Safety and Health
Kimberly Tum Suden
Manager of Facility Safety, Walt
Disney Parks & Resorts Worldwide
Frank White
Mike Wright
Ex OFFICIO
John Mendeloff
Director, RAND Center for Health
and Safety in the Workplace
AS OF DECEMBER 20 09
Director, Health, Safety, and
Environment, United Steelworkers
younes and Soraya Nazarian:
“Our family is proud to sponsor
recent RAND work in Israel to explore
energy alternatives and to aid the
Israeli government with long-range
planning. We are heartened to see
that Israeli officials are now eager
for RAND to conduct more research
there on a variety of subjects and
that the Israeli government and
others are now investing in this work.
This collaboration is good for
RAND, good for Israel, and good
for our family.”
younes Nazarian is a member of the RAND Center for
Middle East Public Policy Advisory Board.
30
Investing in People and Ideas
RAND Center for Middle East Public Policy Advisory Board
Zbigniew Brzezinski (Chair)
L. Paul Bremer
Ann Kerr-Adams
Donald Ellis Simon
Trustee and Counselor, Center for
Strategic and International Studies
Former Presidential Envoy to Iraq
Fulbright Coordinator, UCLA
International Institute
President, The Lucille Ellis Simon
Foundation
Frank C. Carlucci (Vice Chair)
Chairman and Chief Executive
Officer, Cappello Group Inc.
Zalmay Khalilzad
Enzo Viscusi
Chairman and Chief Executive
Officer, Khalilzad Associates, LLC
Group Senior Vice President, ENI
Americas
Chairman Emeritus, The Carlyle
Group; Former U.S. Secretary of
Defense; Trustee Emeritus, RAND
Corporation
Richard A. Abdoo
President, R. A. Abdoo & Co., LLC
Odeh F. Aburdene
President, OAI Advisors
Nancy A. Aossey
President and Chief Executive
Officer, International Medical Corps
William F. Benter
Chairman and International Chief
Executive Officer, Acusis
Alexander L. Cappello
George N. Chammas
Co-President and Chief Financial
Officer, NavLink Inc.
Arnie Fishman
Chairman and Founder, Lieberman
Research Worldwide
Guilford Glazer
Younes Nazarian
President, The Nazarian
Companies
Ex OFFICIO
Edward R. Pope
President and Chief Executive
Officer, RAND Corporation
Chairman and Chief Executive
Officer, DexM Corporation
James A. Thomson
Robin Meili
Chairman, Guilford Glazer
Associated Companies
William Recker
Managing Partner, Iron Bridge
Director, International Programs,
RAND Corporation
Ray R. Irani
David K. Richards
David L. Aaron
Chairman and Chief Executive
Officer, Occidental Petroleum
Corporation
Private Investor
Hasan Shirazi
Director, RAND Center for
Middle East Public Policy,
RAND Corporation
Managing Director, Citi
Private Bank
AS OF DECEMBER 20 09
Oliver H. Delchamps, Jr.
R. King Milling
Ex OFFICIO
Retired Chairman Emeritus,
Delchamps, Inc.
Retired Vice Chairman, Whitney
National Bank
James A. Thomson
Cordell Haymon
John N. Palmer
Vice President, SGS
Chairman, GulfSouth Capital,
Inc.; Former U.S. Ambassador to
Portugal
RAND Gulf States Policy Institute Advisory Board
Beverly Wade Hogan
President, Tougaloo College
John J. Kallenborn
Reuben V. Anderson
Senior Partner, Phelps Dunbar LLP
Donald “Boysie” Bollinger
Chairman, President, and Chief
Executive Officer, Bollinger
Shipyards, Inc.
Kim M. Boyle
Partner, Phelps Dunbar LLP
President New Orleans Region, JP
Morgan Chase Bank, NA
Michael B. Lee
Sean Reilly
Chief Operating Officer, Lamar
Advertising
Donna Saurage
President, Page & Jones
Civic Leader, Baton Rouge,
Louisiana
Diana Lewis
Leland Speed
Civic Leader, New Orleans,
Louisiana
Alden J. McDonald, Jr.
President and Chief Executive
Officer, Liberty Bank and Trust
Company
Chairman, East Group Properties
Vera B. Triplett
Chief Operating Officer,
Capital One-UNO Charter
School Network
President and Chief Executive
Officer, RAND Corporation
Melissa Flournoy
Director, RAND Gulf States Policy
Institute
Gerald Greenwald
Managing Partner, Greenbriar
Equity Group LLC; Chair, RAND
Infrastructure, Safety, and
Environment Advisory Board
Lynne Yowell
Associate General Counsel, State
Farm Insurance; Member, RAND
Center for Corporate Ethics and
Governance Advisory Board
AS OF DECEMBER 20 09
Investing in People and Ideas
31
RAND Advisory Boards
RAND Health Board of Advisors
Joseph P. Sullivan (Chair)
Private Investor
John J. Rydzewski
(Vice Chair)
Managing Director, Christofferson,
Robb & Company, LLC
Neal A. Baer, MD
Executive Producer, Law & Order:
Special Victims Unit
Daniel M. Bradbury
President and Chief
Executive Officer, Amylin
Pharmaceuticals, Inc.
David Brailer, MD
Chairman, Health Evolution
Partners
Denis A. Cortese, MD
President and Chief Executive
Officer, Mayo Clinic
Michael Critelli
Executive Chairman, Pitney
Bowes, Inc.
Ronald I. Dozoretz, MD
Chairman, ValueOptions
Mary Kay Farley
Trustee, Hospital for Special
Surgery, New York; Northern
Michigan Hospital Foundation
Karen Hein, MD
Mary D. Naylor, PhD, FAAN
Patrick Soon-Shiong, MD
Immediate Past President, William
T. Grant Foundation
Director, NewCourtland Center
for Transitions and Health,
University of Pennsylvania School
of Nursing
Founder, Chairman, and Chief
Executive Officer, Abraxis
BioScience, Inc.
Paul H. O’Neill
President Emeritus, Henry Ford
Health System
Susan Hullin
Managing Partner, Hullin Metz &
Co. LLC
Suzanne Nora Johnson
Former Vice Chairman, The
Goldman Sachs Group, Inc.
Karen L. Katen
Sir Michael Rawlins, MD
Chair, Pfizer Foundation
Chairman, National Institute for
Health and Clinical Excellence
Cleon “Bud” T. Knapp
Ian C. Read
Chief Executive Officer and
President, Talwood Corporation
Joseph S. Konowiecki
President, Worldwide
Pharmaceutical Operations,
Pfizer Inc
Michael W. Ferro, Jr.
Managing Partner, Moriah
Partners, LLC
David K. Richards
Chairman and Chief Executive
Officer, Merrick Ventures LLC
Sherry Lansing
Robert G. Funari
Founder and Chief Executive
Officer, The Sherry Lansing
Foundation
Marshall A. “Tom”
Rockwell, MD
Chairman and Chief Executive
Officer, Crescent Healthcare
Frederick W. Gluck
Former Managing Director,
McKinsey & Company, Inc.
Pedro José Greer, Jr., MD
Assistant Dean of Academic
Affairs, Florida International
University College of Medicine
David M. Lawrence, MD
Retired Chairman and Chief
Executive Officer, Kaiser
Foundation Health Plan, Inc. and
Kaiser Foundation Hospitals
General Partner, Cyrcon
Builders
Leonard D. Schaeffer
William C. Weldon
Chairman, Board of Directors,
and Chief Executive Officer,
Johnson & Johnson
Phyllis M. Wise, PhD
Provost and Executive
Vice President, University of
Washington
Ex OFFICIO
James A. Thomson, PhD
President and Chief Executive
Officer, RAND Corporation
Robert H. Brook, MD,
ScD, FACP
Senior Advisor, TPG Capital, LP
Vice President, RAND Corporation;
Director, RAND Health
Sir Maurice Shock
Paul Koegel, PhD
Retired Chairman, The Nuffield Trust
David B. Singer
Managing Director Emeritus, ARCH
Venture Partners
Limited Partner, Maverick
Capital, Ltd.
Cardiologist
Investing in People and Ideas
Private Investor
Steven Lazarus
Frank Litvack, MD, FACC
32
Former U.S. Secretary of
the Treasury; Trustee, RAND
Corporation
Gail L. Warden
Associate Director,
RAND Health
Elizabeth A. McGlynn, PhD
Associate Director, RAND Health
AS OF DECEMBER 20 09
RAND Infrastructure, Safety, and Environment Advisory Board
Gerald Greenwald (Chair)
Lovida H. Coleman, Jr.
Ellen M. Hancock
Rodney E. Slater
Managing Partner, Greenbriar
Equity Group LLC
Partner, Sutherland, Asbill &
Brennan LLP
Partner, Patton Boggs, LLP
S. Ward Atterbury
Margery Colloff
Former Chairman and Chief
Executive Officer, Exodus
Communications
Partner, Mergers & Acquisitions
Practice, White & Case LLP
Partner, Emmet, Marvin & Martin,
LLP
Harold Brown
Janet Crown
Counselor, Center for Strategic
and International Studies; Former
U.S. Secretary of Defense; Trustee
Emeritus, RAND Corporation
Owner, Burn 60 Fitness Studio
A. Frederick Gerstell
Former Chairman and Chief
Executive Officer, CalMat Co.
Scott M. Gordon
Superior Court Commissioner, Los
Angeles County Superior Court
Leslie Hill
Retired Airline Captain,
American Airlines; Former Director,
Dow Jones & Company, Inc.
Douglas J. Smith
Director of Construction and
Facilities Management, Jons
Marketplace
John K. Van de Kamp
President, FTI Consulting
Former Attorney General, State
of California; Of Counsel, Dewey
& LeBoeuf LLP
Michael I. Schneider
John A. Wright
Managing Partner, InfraConsult
LLC
Managing Partner, Rollins
Capital Management, LLC
Frank Holder
AS OF DECEMBER 20 09
RAND Institute for Civil Justice Board of Overseers
Brad D. Brian (Chair)
Kenneth R. Feinberg
Charles Lifland
Paul M. Pohl
Partner, Munger, Tolles & Olson
LLP
Founder and Managing Partner,
Feinberg Rozen LLP
Partner, O’Melveny & Myers LLP
Partner, Jones Day
Richard E. Anderson
Richard W. Fields
Christopher C. Mansfield
Arturo Raschbaum
Chairman and Chief Executive
Officer, The Doctors Company
Chief Executive Officer, Juridica
Capital Management Limited
Senior Vice President and General
Counsel, Liberty Mutual Insurance
Company
Chief Executive Officer,
Maiden Re
Sheila L. Birnbaum
Deborah E. Greenspan
Consuelo B. Marshall
Partner, Skadden, Arps, Slate,
Meagher & Flom LLP
Partner, Dickstein Shapiro LLP
United States District Court Judge,
Central District of California
Partner, Rheingold, Valet,
Rheingold, Shkolnik &
McCartney LLP
Charles W. Matthews, Jr.
Dino E. Robusto
Vice President and General
Counsel, ExxonMobil Corporation
Executive Vice President and
Chief Administrative Officer,
The Chubb Corporation
James L. Brown
James A. Greer II
Director, Center for Consumer
Affairs, University of WisconsinMilwaukee
Patrick E. Higginbotham
Kim M. Brunner
Alan J. Kreczko
Circuit Judge, U.S. Court of
Appeals, Fifth Circuit
Executive Vice President, Chief
Legal Officer, and Secretary, State
Farm Insurance
Executive Vice President and
General Counsel, The Hartford
Robert A. Clifford
Partner, Clifford Law Offices, P.C.
Senior Vice President and General
Counsel, Merck & Co., Inc.
Alexander Dimitrief
Christian Lahnstein
Bruce N. Kuhlik
Vice President and Senior
Counsel, Litigation and Legal
Policy, General Electric Company
Head of the Department, Risk,
Liability & Insurance, Munich Re
Dan C. Dunmoyer
Senior Vice President and
Associate General Counsel,
Pfizer Inc
Senior Vice President,
Government and Industry
Affairs; Head of State Legislative
and Regulatory Affairs, USA,
Zurich and Farmers Financial
Services
Bradley E. Lerman
Michele Coleman Mayes
Senior Vice President and General
Counsel, The Allstate Corporation
Robert E. McGarrah, Jr.
Counsel, Office of Investment,
AFL-CIO
Paul D. Rheingold
Lee H. Rosenthal
United States District Judge,
Southern District of Texas,
Houston Division
Charles R. Schader
Partner, Freehills
Senior Vice President and
Chief Claims Officer, Chartis
Insurance
Robert S. Peck
Hemant H. Shah
Michael G. Mills
President, Center for Constitutional
Litigation
Kathleen Flynn Peterson
Partner, Robins, Kaplan, Miller &
Ciresi LLP
President and Chief Executive
Officer, Risk Management
Solutions, Inc.
Georgene M. Vairo
Professor of Law and
William M. Rains Fellow,
Loyola Law School
AS OF DECEMBER 20 09
Investing in People and Ideas
33
Oversight Boards
These are the oversight boards for the federally funded research and development centers (FFRDCs) at RAND, all three of which
are sponsored by the U.S. Department of Defense. FFRDCs are independent entities that assist the United States government
with scientific research, analysis, and development.
Arroyo Center Policy Committee
GEN Ann E. Dunwoody
LTG Ricky Lynch
LTG Jack C. Stultz, Jr.
Vice Chief of Staff, U.S. Army
Commanding General, U.S. Army
Materiel Command
Dean G. Popps (Cochair)
Terrence C. Salt
Chief, Army Reserve/Commanding
General, U.S. Army Reserve
Command
Assistant Secretary of the Army
(Acquisition, Logistics, and
Technology)
Principal Deputy Assistant Secretary
of the Army (Civil Works)/Deputy
ASA (Legislation)
Assistant Chief of Staff for Installation
Management/Commanding General,
Installation Management Command,
U.S. Army
LTG John F. Mulholland
Deputy Chief of Staff, G-3/5/7,
U.S. Army
Thomas R. Lamont
Robert M. Speer
Assistant Secretary of the Army
(Manpower and Reserve Affairs)
Principal Deputy Assistant Secretary
of the Army (Financial Management
and Comptroller) (Controls)
GEN Peter W. Chiarelli
(Cochair)
GEN Charles C. Campbell
Commanding General, U.S. Army
Forces Command
GEN Martin E. Dempsey
Commanding General, U.S. Army
Training and Doctrine Command
LTG Benjamin C. Freakley
Commanding General, U.S. Army
Accessions Command
LTG Robert P. Lennox
Deputy Chief of Staff, G-8, U.S. Army
Commanding General, U.S. Army
Special Operations Command
LTG Eric B. Schoomaker
Commanding General, U.S. Army
Medical Command/The Surgeon
General
LTG Jeffrey Sorenson
Chief Information Officer, G-6,
U.S. Army
LTG James D. Thurman
LTG Richard P. Zahner
Deputy Chief of Staff, G-2, U.S. Army
MG Gina B. Farrisee
Acting Deputy Chief of Staff, G-1,
U.S. Army
MG William T. Grisoli
(Executive Agent)
LTG Mitchell H. Stevenson
Director, Program Analysis and
Evaluation
Deputy Chief of Staff, G-4,
U.S. Army
AS OF DECEMBER 20 09
RAND National Defense Research Institute Advisory Board
Ashton Carter (Chair)
Sharon Cooper
Regina Dugan
Benjamin Riley
Under Secretary of Defense
for Acquisition, Technology,
and Logistics
Deputy Under Secretary of Defense
for Program Integration, Office of
the Under Secretary of Defense for
Personnel and Readiness
Director, Defense Advanced
Research Projects Agency
Principal Deputy, Rapid Fielding
Directorate
Christine Fox
Philip Rodgers
Director, Cost Assessment and
Program Evaluation, Office of the
Secretary of Defense
Principal Deputy Director,
Acquisition Resources and Analysis,
Office of the Under Secretary of
Defense for Acquisition, Technology,
and Logistics
Arthur “Trip” Barber
Deputy Director, Capability,
Analysis, and Assessment Division,
Office of the Deputy Chief of
Naval Operations
Lisa Disbrow
Gary Bliss
Amanda Dory
Deputy Director, OSD Studies and
FFRDC Programs, Office of the
Under Secretary of Defense for
Acquisition, Technology,
and Logistics
Deputy Assistant Secretary
of Defense for Strategy, Office of
the Under Secretary of Defense
for Policy
Vice Director, Force Structures,
Resources, and Assessment
Directorate (J-8), Joint Staff
Jim Miller
Principal Deputy Under Secretary
of Defense for Policy
Brad Millick
Director, Forecasting and
Evaluation, Office of the Under
Secretary of Defense for
Intelligence
Nancy Spruill
(Executive Agent)
Director, Acquisition Resources
and Analysis, Office of the
Under Secretary of Defense
for Acquisition, Technology,
and Logistics
AS OF DECEMBER 20 09
USAF Project AIR FORCE Steering Group
Gen Carroll H. Chandler
(Chair)
Lt Gen Richard Y. Newton III
Lt Gen William T. Lord
Maj Gen C. Donald Alston
Vice Chief of Staff, Headquarters
U.S. Air Force
Deputy Chief of Staff for Manpower
and Personnel, Headquarters U.S.
Air Force
Assistant Chief of Staff, Strategic
Deterrence and Nuclear Integration,
Headquarters U.S. Air Force
Lt Gen David A. Deptula
Lt Gen Mark D. Shackelford
Chief of Warfighting Integration and
Chief Information Officer, Office of
the Secretary of the Air Force,
The Pentagon
Deputy Chief of Staff for Intelligence,
Surveillance, and Reconnaissance,
Headquarters U.S. Air Force
Military Deputy, Office of the
Assistant Secretary of the
Air Force for Acquisition, The
Pentagon
Lt Gen (Dr.) Charles B. Green
Lt Gen Loren M. Reno
Deputy Chief of Staff for Operations,
Plans, and Requirements,
Headquarters U.S. Air Force
Lt Gen William L. Shelton
Assistant Vice Chief of Staff
and Director, Air Force Staff,
Headquarters U.S. Air Force
34
Investing in People and Ideas
Deputy Chief of Staff for Logistics,
Installations, and Mission
Support, Headquarters U.S. Air
Force
Surgeon General of the Air Force,
Headquarters U.S. Air Force
Lt Gen Philip M. Breedlove
Lt Gen Christopher D. Miller
Deputy Chief of Staff for Strategic
Plans and Programs, Headquarters
U.S. Air Force
Brig Gen Richard C.
Johnston
Director, Strategic Planning,
Deputy Chief of Staff for Strategic
Plans and Programs,
Headquarters U.S. Air Force
Jacqueline R. Henningsen
Director for Studies and Analyses,
Assessments and Lessons Learned,
Headquarters U.S. Air Force
AS OF DECEMBER 20 09
RAND Europe is an independent subsidiary of the RAND Corporation with offices in Cambridge, United Kingdom, and
Brussels, Belgium.
RAND Europe Board of Trustees
James A. Thomson (Chair)
Lord Crisp KCB
President and Chief Executive
Officer, RAND Corporation
United States
Independent Crossbench
Member of the House of Lords
United Kingdom
Philippa Foster Back OBE
Sir Lawrence Freedman
KCMG
Director, Institute of
Business Ethics
United Kingdom
Sir John Boyd KCMG
Retired Master, Churchill College,
University of Cambridge;
Former British Ambassador
to Japan
United Kingdom
Laurens Jan Brinkhorst
Professor of International
and European Law, University
of Leiden; Former Deputy
Minister of the Netherlands
The Netherlands
Professor of War Studies
and Vice Principal, King’s
College London
United Kingdom
Jonathan Grant
President, RAND Europe
United Kingdom
Frank Kelly FRS
Master, Christ’s College,
University of Cambridge
United Kingdom
Gunvor Kronman
Philip Lader
Michael Portillo
Chairman, The WPP Group;
Former U.S. Ambassador to the
Court of St. James’s; Trustee,
RAND Corporation
United States
Former Cabinet Minister
United Kingdom
AS OF DECEMBER 20 09
Chief Executive Officer,
Hanaholmen–Cultural
Cooperation Center for Finland
and Sweden
Finland
The RAND-Qatar Policy Institute (RQPI) is a collaboration between the RAND Corporation and the Qatar Foundation that is
focused on helping to improve policy and decisionmaking across the Middle East, North Africa, and South Asia. The Qatar
Foundation for Education, Science and Community Development is a private, chartered, nonprofit organization with a mission to
prepare the people of Qatar and the region to meet the challenges of an ever-changing world.
RAND-Qatar Policy Institute Board of Overseers
Her Highness
Sheikha Mozah Bint Nasser
Al Missned (Cochair)
Chairperson, Qatar Foundation
for Education, Science, and
Community Development
Michael Rich
(Cochair)
Executive Vice President,
RAND Corporation
His Excellency Dr. Hamad
Abdulaziz Al-Kawari
David L. Aaron
Ex OFFICIO
Minister of Culture, Arts, and
Heritage, State of Qatar
Director, RAND Center for Middle
East Public Policy,
RAND Corporation
Sheikh Hamad Bin Faisal
Bin Thani Al-Thani
INDEPENDENT MEMBER
Chairman, Al Khalij Commercial
Bank
Naguib Sawiris
Director, RAND-Qatar
Policy Institute
Karen Elliott House
Chairman and Chief Executive
Officer, Orascom Telecom
AS OF DECEMBER 20 09
Former Publisher, The Wall Street
Journal; Former Senior Vice
President, Dow Jones and
Company, Inc.
Rashid Al Naimi
Vice President for Administration,
Qatar Foundation
Bruce Nardulli
Investing in People and Ideas
35
Clients and Grantors
U.S. Government
Administrative Office of the
U.S. Courts
Department of Commerce
National Institute of
Standards and Technology
National Oceanic and
Atmospheric Administration
Department of Defense
Defense Logistics Agency
Department of the Air Force
Department of the Army
Medical Research
Acquisition Activity
Department of the Navy
Joint Staff
National Defense
University
Office of the Secretary
of Defense
Assistant Secretary
of Defense for
Networks and
Information Integration
Deputy Assistant
Secretary of Defense for
Russia/Ukraine/Eurasia
Deputy Secretary of
Defense
Joint Improvised
Explosive Device
Defeat Organization
Under Secretary of
Defense for Acquisition,
Technology, and
Logistics
Defense Advanced
Research Projects
Agency
Under Secretary of
Defense for Personnel
and Readiness
Under Secretary of
Defense for Policy
Unified Combatant
Commands
Department of Education
Institute of Education
Sciences
Department of Energy
National Energy
Technology Laboratory
Agency for Healthcare
Research and Quality
Medicare Payment Advisory
Commission
Centers for Medicare and
Medicaid Services
National Aeronautics and
Space Administration
Centers for Disease Control
and Prevention
National Institute for
Occupational Safety and
Health
National Institutes of Health
National Cancer Institute
National Heart, Lung, and
Blood Institute
National Institute on Aging
National Institute on
Alcohol Abuse and
Alcoholism
National Institute of Allergy
and Infectious Diseases
National Institute of
Child Health and Human
Development
National Institute of
Diabetes and Digestive
and Kidney Disease
National Institute on Drug
Abuse
National Institute of
Environmental Health
Sciences
National Institute of Mental
Health
National Institute of
Nursing Research
Office of the National
Coordinator for Health
Information Technology
Department of Homeland
Security
U.S. Coast Guard
Department of Justice
Federal Bureau of
Investigation
National Institute of Justice
Office of Justice Programs
Department of Labor
Department of State
Department of the Treasury
Department of Veterans Affairs
Sepulveda VA Medical
Center
National Renewable
Energy Laboratory
Environmental Protection
Agency
Department of Health and
Human Services
Federal Communications
Commission
Administration for Children
and Families
Office of Planning,
Research, and
Evaluation
Federal Reserve Bank of
Boston
Federal Reserve Bank of
New York
Intelligence Community
36
Investing in People and Ideas
National Science Foundation
Social Security Administration
U.S. Postal Service
Non-U.S. Governments,
Agencies, and Ministries
Commonwealth of Australia
European Commission
Directorate-General for
Employment, Social Affairs
and Equal Opportunities
Directorate-General for
Information Society and
Media
Directorate-General for
Freedom, Security and
Justice
Mexico
Institute for Science and
Technology of the Federal
District (ICyTDF)
State of Yucatan
Republic of Korea Army
Republic of Singapore
Institute of Mental Health
Ministry of Defence
Ministry of Health
State of Qatar
National Health Authority
Supreme Education Council
Supreme Council for Family
Affairs
United Kingdom
Department of Health
Department for Transport
Ministry of Defence
National Audit Office
International
Organizations
Andrew T. Huang Medical
Education Promotion Fund
Mott MacDonald Group
Surveymeter
Techniker Krankenkasse
Tianjin Economic-Technological
Development Area
State and Local
Governments
State of California
California Energy
Commission
Commission on Health
and Safety and Workers’
Compensation
Department of Corrections
and Rehabilitation
California Municipal Agencies
Los Angeles County
Los Angeles County
Probation Department
Los Angeles Unified School
District
Western Riverside County
Regional Conservation
Authority
City of Cincinnati
Commonwealth of
Massachusetts
Commonwealth of Pennsylvania
Allegheny County
Department of Human
Services
Allegheny Intermediate Unit
Department of Community
and Economic Development
Pennsylvania Legislative
Budget and Finance
Committee
Pittsburgh Public Schools
District of Columbia
Department of Health
Department of Mental Health
Executive Office of the Mayor
State of Maryland
New York City
Department of Education
Dubai Community Ventures LLC
Colleges and Universities
Fox Center
Boston University
Infectious Diseases Institute
Brunel University, West London
The King’s Fund
Health Economics
Research Group
Local Better Regulation Office
Carnegie Mellon University
Mitsubishi Research
Institute, Inc.
Columbia University
Medical Center
Dartmouth College
Drew University
The Ford Foundation
GlaxoSmithKline
Georgetown University
Bill and Melinda Gates
Foundation
Guardians of Honor, LLC
The Johns Hopkins University
Louisiana State University
Agricultural and Mechanical
College
National University of
Singapore
Qatar University
Stanford University
Temple University
Tilburg University, CentERdata
Tulane University
University College, Dublin
University of Arizona
University of California,
Berkeley
Hartford Foundation
The Health Foundation
The William and Flora Hewlett
Foundation
Halcrow Group Ltd.
Battelle Pacific Northwest
National Laboratory
Health Services Advisory Group
Beaver Valley Intermediate Unit
HighMark, Inc.
Bipartisan Policy Center
ICF International
Japan Foundation
Joint Commission International
BlueCross BlueShield / Blue
Plus of Minnesota
The Robert Wood Johnson
Foundation
KRA Corporation
Brookings Institution
Mathematica Policy Research
Ewing Marion Kauffman
Foundation
Merck & Co., Inc
Center for Health Care
Strategies, Inc.
Korea Foundation
National Pharmaceutical
Council
Henry Luce Foundation
National Projects Holding Co.
MacArthur Foundation
Native American Industrial
Distributors
McCormick Tribune Foundation
The Meth Project Foundation
Ortho-McNeil Janssen Scientific
Affairs, LLC
University of California, Los
Angeles
New York City Police
Foundation
University of Florida
New York State Health
Foundation
Pfizer Inc
Open Society Institute
Roche
The David and Lucile Packard
Foundation
Sanofi Pharmaceuticals, Inc.
University of Kent
University of Maryland
University of Medicine and
Dentistry of New Jersey
Association of Public Health
Laboratories
PepsiCo Inc.
Risk Management Solutions
Schering-Plough
Center for Health Improvement
Children’s Hospital Boston
Children’s National Medical
Center
Community Care Behavioral
Health Organization
Council for Aid to Education
District of Columbia Primary
Care Association
ECRI Institute
Educational Testing Service
Filene Research Institute
The Fund for Public Schools
University of Michigan
The Ralph M. Parsons
Foundation
University of North Carolina,
Chapel Hill
William Penn Foundation
Tatweer Dubai
The Pew Charitable Trusts
UnitedHealthcare Services Inc.
Merck Childhood Asthma
Network, Inc.
Qatar Foundation
U.S. Chamber of Commerce
Missouri Foundation for Health
The Rockefeller Foundation
WSP UK
The MITRE Corporation
University of North Texas
University of Pittsburgh
University of Rochester
University of Southern
California
STERIS Corporation
Rosenberg Foundation
Professional Associations
University of Texas at Dallas
United Health Foundation
American Medical Association
Vanderbilt University
Wallace Foundation
Kidney Disease Program
of Glendale
Foundations
Industry
Arthritis Research Campaign
Accent Marketing and
Research
Analytical Services, Inc.
Los Alamos National Laboratory
Motion Picture Association
Smith Richardson Foundation
Amgen Foundation
Humanity United
National Bureau of Economic
Research
National Military Family
Association
Mehlman Vogel Castagnetti Inc.
New England Medical Center
Hospitals
The Real Estate Roundtable
New Leaders for New Schools
Other Nonprofit
Organizations
Nuclear Threat Initiative
AARP
Oklahoma City National
Memorial Institute for the
Prevention of Terrorism
Altarum Institute
Partnership for Prevention
American Colleges of
Physicians
Primary Care Coalition of
Montgomery County
American Red Cross
Quantum Foundation, Inc.
Cambridge Systematics, Inc.
Arkansas Tobacco Settlement
Commission
Samueli Institute
Casey Family Programs
CSSI, Inc.
Arts Education Collaborative
Deloitte & Touche LLP
U.S. Institute of Peace
The Commonwealth Fund
BEST Foundation for a Drug
Free Tomorrow
California Community
Foundation
The California Endowment
California HealthCare
Foundation
Carnegie Corporation
of New York
ASDC
Berkeley Policy Associates
BioReliance Invitrogen
Bioservices
Blue Cross of California
Brown and Caldwell
Ethicon Endo-Surgery Inc.
Florida Medical Quality
Assurance, Inc.
UPMC for You
World Bank
World Security Institute
Investing in People and Ideas
37
Financial Report
PricewaterhouseCoopers LLP
350 South Grand Avenue
Los Angeles CA 90071
Telephone (213) 356 6000
Facsimile (813) 637 4444
Report of Independent Auditors
To the Board of Trustees
The RAND Corporation
In our opinion, the accompanying consolidated statement of financial position and the related
consolidated statements of activities and changes in net assets, and cash flows present fairly, in all
material respects, the financial position of the RAND Corporation and its subsidiary at September 27,
2009, and the changes in their net assets and their cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America. These financial
statements are the responsibility of the RAND Corporation’s management. Our responsibility is to
express an opinion on these financial statements based on our audit. The prior year summarized
comparative information has been derived from the RAND Corporation’s September 28, 2008
consolidated financial statements, and in our report dated January 26, 2009, we expressed an
unqualified opinion on those financial statements. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
As discussed in Note 2, the RAND Corporation adopted the new accounting and disclosure guidance
related to endowment funds in the year ended September 27, 2009.
January 29, 2010
38
The RAND Corporation
consolidated s tat eMents oF Financial P osition
with summarized financial information for the year ended September 28, 2008
(in thousands)
September 27, 2009
September 28, 2008
$
$
ASSETS
Current assets
Cash and cash equivalents
Receivables, net
Billed and unbilled costs and fees
Other receivables
29,501
27,092
41,200
3,153
41,072
2,640
3,953
3,964
77,807
74,768
Land
Buildings and improvements
Leasehold improvements
1,334
108,702
15,279
1,334
107,546
15,016
Equipment
Construction in progress
51,600
3,249
180,164
(54,776)
47,712
3,336
174,944
(46,469)
125,388
128,475
174,516
1,114
183,752
1,105
Prepaid expenses and other current assets
Total current assets
Property and equipment
Less: Accumulated depreciation and amortization
Net property and equipment
Long-term investments
Building project fund investments
Other assets
5,382
Total assets
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable and other liabilities
Unexpended portion of grants and contracts received
Accrued compensation and vacation
Current portion of long-term debt
5,965
$
384,207
$
394,065
$
17,682
12,192
15,833
1,845
$
17,580
14,506
15,025
1,560
47,552
48,671
Deferred rent
Accrued postretirement benefit liability
Other long-term liabilities
Long-term debt, less current portion
Total current liabilities
10,509
16,211
14,256
124,735
12,065
12,136
8,070
126,580
Total liabilities
Commitments and contingencies (Note 9)
Net assets
Unrestricted
Operations
Designated for investment
213,263
207,522
—
104,901
—
117,187
3,486
9,063
108,387
126,250
18,873
43,684
17,985
42,308
170,944
186,543
Designated for special use
Total unrestricted
Temporarily restricted
Permanently restricted
Total net assets
Total liabilities and net assets
$
384,207
$
394,065
The accompanying notes are an integral part of these consolidated financial statements.
39
40
The RAND Corporation
consolidated s tat eMents o F actiVities and cH anGes in net assets
with summarized financial information for the year ended September 28, 2008
(in thousands)
For the Years Ended
September 27, 2009
Operations
Total
Unrestricted
Designated
September 28, 2008
Temporarily
Restricted
Permanently
Restricted
Total
Total
REVENUE, GAINS, AND OTHER SUPPORT
Contracts and grants
$
Fees
228,738
$
—
$
228,738
$
—
$
—
$
228,738
$
225,342
12,001
—
12,001
—
—
12,001
Income on investments, net
—
2,554
2,554
868
—
3,422
8,926
Net realized gains on investments
—
1,728
1,728
717
—
2,445
4,337
Net unrealized (losses) gains on investments
11,561
—
(6,871)
(6,871)
1,279
—
(5,592)
(33,117)
6,325
—
6,325
1,895
1,376
9,596
15,477
42
—
42
—
—
42
119
Transfer of designated net assets
to operations (Note 2)
7,180
(7,180)
—
—
—
—
—
Net assets released from restrictions
7,951
—
7,951
(7,951)
—
—
—
262,237
(9,769)
252,468
(3,192)
1,376
250,652
232,645
191,929
—
191,929
—
—
191,929
192,937
64,362
—
64,362
—
—
64,362
66,662
256,291
—
256,291
—
—
256,291
259,599
5,946
(9,769)
(3,823)
(3,192)
1,376
(5,639)
(26,954)
Contributions
Other investment income
Total revenues, gains, and other support
EXPENSES AND LOSSES
Research
Management and general
Total expenses
Change in net assets before other items
Other items:
Change in fair value of derivative instruments
(Note 8)
Cumulative effect of accounting change (Note 10)
Adjustment to accrued postretirement benefit
liability (other than net periodic
postretirement benefit cost) (Note 7)
Net asset transfers (Note 2)
Change in net assets
Net assets at beginning of year
Net assets at end of year
(6,186)
—
(6,186)
—
—
(6,186)
(4,445)
—
(4,262)
(4,262)
4,262
—
—
—
(3,774)
—
(3,774)
—
—
(3,774)
1,834
4,014
(3,832)
182
(182)
—
—
—
—
(17,863)
(17,863)
888
1,376
(15,599)
(29,565)
—
$
—
126,250
$
108,387
126,250
$
108,387
17,985
$
18,873
42,308
$
The accompanying notes are an integral part of these consolidated financial statements.
43,684
186,543
$
170,944
216,108
$
186,543
The RAND Corporation
consolidated s tat eMents oF casH FloWs
with summarized financial information for the year ended September 28, 2008
(in thousands)
For the Year Ended
September 27, 2009
For the Year Ended
September 28, 2008
$
$
Cash flows from operating activities:
Change in net assets
(15,599)
(29,565)
Adjustments to reconcile change in net assets to net cash
provided by operating activities:
Depreciation and amortization
8,548
Loss on debt extinguishment
Net realized/unrealized losses
Permanently restricted contribution revenue
Change in fair value of derivative instruments
8,558
—
3,090
3,147
28,781
(1,376)
(2,142)
6,186
4,445
Foreign exchange gain
(4)
(82)
Loss on disposition of property and equipment
—
16
Changes in assets and liabilities:
Increase in billed and unbilled costs and fees
Decrease in other receivables
(128)
(3,517)
157
1,710
Decrease in prepaid and other current assets
11
370
Decrease (increase) in other long-term assets
543
(163)
Increase (decrease) in accounts payable and other liabilities
102
(3,216)
Decrease in unexpended portion of grants and
contracts received
(2,314)
Increase in accrued compensation and vacation
(5,646)
808
Decrease in deferred rent
673
(1,556)
Increase (decrease) in postretirement benefit liability
(711)
4,075
(1,405)
2,600
1,196
(54,048)
(76,414)
Sales of investments
60,128
71,997
Purchases of property and equipment
(5,421)
(5,791)
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of investments
Net cash provided by (used in) investing activities
659
(10,208)
Payment of bonds through refinancing
—
(127,105)
Proceeds from bond issuance
—
128,140
Cash flows from financing activities:
Payments of bond issuance costs
—
Principal payments on long-term debt
Contributions restricted for purchase of property and equipment
Permanently restricted contributions received in cash
Net cash used in financing activities
Effect of currency exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents
(1,870)
—
50
691
2,166
(869)
(118)
19
48
2,409
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(1,499)
(1,560)
(9,082)
27,092
$
29,501
36,174
$
27,092
The accompanying notes are an integral part of these consolidated financial statements.
41
The RAND Corporation
notes to consolidated F inancial stateM ents
1. CorporateOrganization:
RAND Corporation (RAND) is a nonprofit, tax-exempt corporation performing research and analysis funded
primarily by contracts, grants, and contributions. In addition, RAND conducts educational programs that provide
graduate training.
The consolidated financial statements of RAND include the accounts of a controlled affiliate: RAND Europe, a
charity domiciled in the United Kingdom. All intercompany balances and transactions have been eliminated in
consolidation.
2. SummaryofSignificantAccountingPolicies:
FiscalYear.RAND’sfiscalyearisbasedona52-or53-weekyearendingontheSundayclosesttoSeptember30.
Fiscalyears2009and2008werebasedona52-weekperiod.
Basis of Presentation. The accompanying financial statements have been prepared on the accrual basis of
accountinginaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.
Netassetsareclassifiedintothreecategoriesaccordingtodonor-imposedrestrictions,asfollows:
Permanently restricted—Net assets subject to donor-imposed stipulations that neither expire by passage of
timenorcanbefulfilledorremovedbyactionsofRAND.
Temporarily restricted—Net assets whose use by RAND is subject to donor-imposed stipulations that either
expirebypassageoftimeorcanbefulfilledandremovedbyactionsofRAND.
Unrestricted—Netassetsthatarenotsubjecttodonor-imposedstipulations.
The financial statements include certain prior year summarized comparative information in total but not by
netassetcategory.Suchprioryearinformationdoesnotincludesufficientdetailtoconstituteapresentation
inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Accordingly,such
informationshouldbereadinconjunctionwithRAND’sfinancialstatementsfortheyearendedSeptember28,
2008,fromwhichthesummarizedfinancialinformationwasderived.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements. Estimates also affect the reported amount of revenues, expenses, or other changes in
net assets during the reporting period. Actual results could differ from these estimates.
Revenue and Expense Recognition. Contract and grant revenues are recognized as the related services are
performed in accordance with the terms of the contract or grant using the proportional performance method.
Contributions, including unconditional promises to give, are recognized as revenue in the period received and
are reported as increases in the appropriate category of net assets. Donor-restricted contributions that are
received and spent within the same fiscal year are reported as unrestricted revenue.
Expenses are generally reported as decreases in unrestricted net assets. Expirations of donor-imposed stipulations
or of board designations that simultaneously increase one class of net assets and decrease another are reported
as transfers between the applicable classes of net assets.
ConcentrationsofRisk. Cash and cash equivalents are maintained with several financial institutions. Deposits
held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may
be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore
bear minimal credit risk.
RAND derived 80 percent and 78 percent of its research revenues in fiscal years 2009 and 2008, respectively, from
contracts, grants, and fees with agencies of the federal government.
CashandCashEquivalents. RAND considers all highly liquid financial instruments purchased with an original
maturity of three months or less, and whose purpose is not restricted, to be cash equivalents.
PropertyandEquipment. Property and equipment is stated at cost. Depreciation is computed by the straight-line
method over the following estimated useful lives of the assets: 5 to 40 years for buildings and improvements
42
and 3 to 20 years for equipment. Leasehold improvements are amortized by the straight-line method over
the shorter of the estimated useful lives of the assets or the term of the lease. Construction in progress will
be amortized over the estimated useful lives of the respective assets when they are ready for their intended
use. Certain computer systems and software are internally developed. Costs associated with the application
development stage are capitalized and depreciated over the useful life of the system or software. All other
costs are expensed as incurred. Included in Equipment on the Consolidated Statements of Financial Position
was $8,649,000 and $7,068,000 of computer systems and software at September 27, 2009, and September 28,
2008, respectively.
When assets are retired, the assets and related allowances for depreciation and amortization are eliminated
and any resulting gain or loss is reflected in operations. As of September 27, 2009, and September 28, 2008,
approximately $19,789,000 and $17,175,000, respectively, of fully depreciated assets were in use.
Investments. All investments of permanently restricted net assets, board-designated unrestricted net assets, and
certain temporarily restricted net assets are pooled in a long-term investment fund (the LTIF). Income on the
LTIF is allocated to individual funds based on the average balance for each fund.
The percentage of board-designated funds distributed for unrestricted use was 5.0 percent in fiscal years 2009
and 2008 based on the average of the trailing 12-quarter market values of the funds. The total distribution was
$7,180,000 and $6,804,000 for fiscal years 2009 and 2008, respectively (see also Note 10).
Gains and losses on investments and investment income are reported as increases or decreases in unrestricted
net assets and temporarily restricted net assets, unless otherwise stipulated by the donor.
BuildingProjectFundInvestments. The net proceeds from the 2002 tax-exempt bond issuance (see Note 8) are
invested in short-term AAA-rated 30-day commercial paper and/or a money market fund.
These proceeds are subject to arbitrage rebate and yield restriction rules under the U.S. Internal Revenue Code
in which excess earnings on tax-exempt bond proceeds must be rebated to the federal government if the yield
on the investments exceeds the effective yield on the related tax-exempt bonds. The liability, if any, is accrued
on an annual basis and must be remitted to the Internal Revenue Service after the end of every fifth bond
year and upon full retirement of the bonds. RAND’s liability was immaterial as of September 27, 2009, and
September 28, 2008.
Income Tax Status. RAND is exempt from income tax under Section 501(c)(3) of the U.S. Internal Revenue
Code and corresponding California provisions and has qualified for the 50 percent charitable contributions
limitation. RAND has been classified as an organization that is not a private foundation under Section 509(a)(1)
and has been designated a “publicly supported” organization under Section 170(b)(1)(A)(vi) of the U.S. Internal
Revenue Code.
Foreign Currency Translation. The assets and liabilities of RAND Europe are translated at year-end exchange
rates; transactions are translated at the average exchange rates during the year. The effects from the translation
of foreign currencies in the current and prior year are cumulatively immaterial to the consolidated financial
statements.
SupplementalCashFlowInformation.Cash paid for interest was $3,299,000 in fiscal year 2009 and $4,658,000
in fiscal year 2008.
NewAccountingPronouncements. In June 2009, the Financial Accounting Standards Board (FASB) established
the FASB Accounting Standards Codification (Codification) to become the sole source of authoritative U.S.
generally accepted accounting principles (GAAP) recognized by the FASB to be applied by all nongovernmental
entities (except SEC registrants who are subject to additional authoritative guidance published by the SEC).
The Codification does not change GAAP (except in limited circumstances) but modifies the GAAP hierarchy to
include only two levels of GAAP: authoritative and non-authoritative. As a result of RAND’s adoption of the
Codification, references to legacy GAAP accounting pronouncements in the financial statement footnotes have
been modified to reflect plain English descriptions.
Effective September 29, 2008, RAND adopted the authoritative accounting guidance for fair value measurements,
for all financial assets and liabilities and for nonfinancial assets and liabilities that are recognized or disclosed
at fair value in the financial statements on a recurring basis. The adoption did not require an adjustment to the
opening balance of net assets. See also Note 6.
43
Concurrent with the enactment of a new California law (the Uniform Prudent Management of Institutional
Funds Act, or UPMIFA) that was effective January 1, 2009, RAND adopted the associated authoritative
accounting guidance issued by the FASB. UPMIFA requires that all donor-restricted assets not designated as
permanently restricted be designated as temporarily restricted until appropriated for spending, including
earnings on temporarily restricted net assets which prior to UPMIFA were classified as board-designated
unrestricted net assets. As a result of the UPMIFA implementation, RAND transferred $4,262,000 from boarddesignated unrestricted net assets to temporarily restricted net assets during fiscal year 2009. See also Note 10.
NetAssetTransfers. Noncash transfers from unrestricted net assets designated for investment to unrestricted
net assets from operations totaling $4,014,000 and $5,913,000 were required during fiscal years 2009 and 2008,
respectively, due to the change in fair value of derivative instruments (see Note 8) and the adjustment to accrued
postretirement benefit liability (see Note 7). An additional noncash transfer of $2,096,000 from unrestricted net
assets designated for investment to temporarily restricted net assets was recorded as of September 28, 2008,
as the decline in the market value of investments for certain funds resulted in the value of those funds being
lower than the amount donated.
All current and prior year noncash net asset transfers are reversed as unrestricted net assets from operations
become available and as the market value of the investment recovers. During fiscal year 2009, $182,000 of
temporarily restricted net assets were transferred back to unrestricted net assets designated for investment due
to market value recovery of the investments.
Reclassifications. Certain reclassifications have been made to prior year amounts to conform to the current year
presentation. These include a reclassification of contract and grant revenue to fee revenue and a reclassification
of research expense to management and general expense. These reclassifications had no effect on net assets.
Subsequent Events. Subsequent events have been evaluated through January 29, 2010, the date the financial
statements were issued.
3. Billed and UnbilledCosts and Fees:
The following table summarizes the components of billed and unbilled contract and grant costs and fees
(in thousands):
September 27, 2009
U.S. government agencies
Billed
Unbilled
$
State, local, and private sponsors
Billed
Unbilled
Allowance for bad debt
$
13,894
13,296
27,190
September 28, 2008
$
13,557
15,177
28,734
6,874
7,388
6,533
6,232
14,262
(252)
12,765
(427)
41,200
$
41,072
Unbilled amounts principally represent recoverable costs and accrued fees billed in the first quarter of fiscal year
2010 and fiscal year 2009, respectively.
No significant contract terminations are anticipated at present, and past contract terminations have not
resulted in significant unreimbursed costs.
4. ContributionsReceivable:
Unconditional promises to give were $4,691,000 and $4,824,000 at September 27, 2009, and September 28,
2008, respectively. The receivables are recorded net of the discount for future cash flows, and allowance for
bad debt using the credit-adjusted rate of return appropriate for the expected term of the promise to give
determined at the time the unconditional promise to give is initially recognized (5%). Receivables expected in
one year or less are included in Other receivables and receivables expected after one year are included in Other
assets on the Consolidated Statements of Financial Position. The carrying amount of the receivables is deemed
a reasonable estimate of their fair value.
44
Realization of the pledges is expected in the following periods (in thousands):
In one year or less
Between one year and five years
September 27, 2009
September 28, 2008
$
$
2,832
2,180
Less discount
Allowance for bad debt
2,600
2,393
5,012
4,993
(146)
(169)
(175)
$
4,691
—
$
4,824
As more fully described in Note 11, contributions receivable are primarily intended for the following uses
(in thousands):
Temporarily restricted
Permanently restricted
September 27, 2009
September 28, 2008
$
3,767
924
$
4,593
231
$
4,691
$
4,824
During the fiscal year ended September 27, 2009, RAND received payments of prior year pledges in the amount
of $1,746,000.
Donors have made conditional promises to give of $2,933,000 and $3,304,000 as of September 27, 2009, and
September 28, 2008, respectively. These conditional pledges, which include revocable deferred gifts, are not
recorded in these consolidated financial statements.
5. Long-TermInvestments:
Cash and cash equivalents included in long-term investments consist of money market funds and other shortterm investments and are carried at fair value.
Long-term investments are presented at fair value and all related transactions are recorded on the trade date.
The investments consist of cash and money market funds, domestic and foreign equity funds, bond funds, and
alternative investments. Approximately 29 percent of the long-term investments consist of foreign investment
holdings.
As of September 27, 2009, RAND had commitments outstanding to purchase alternative investments of
$18,449,000; of these commitments, approximately $4,202,000 is due within one year.
Investment income is shown net of related expenses of $321,000 and $441,000, for the fiscal years ended
September 27, 2009, and September 28, 2008, respectively.
Long-term investments consist of the following (in thousands):
September 27, 2009
Cash and cash equivalents
$
2,648
September 28, 2008
$
5,464
Shares of fixed income funds, at fair value
(cost, 2009—$60,946, and 2008—$65,641)
61,102
65,319
Shares of equity funds, at fair value
(cost, 2009—$68,162, and 2008—$66,162)
65,351
68,582
Alternative investments
(cost, 2009—$40,370, and 2008—$38,503)
45,415
$
174,516
44,387
$
183,752
45
6. FairValueMeasurements:
The authoritative accounting guidance for fair value measurement clarifies the definition of fair value,
establishes a fair value hierarchy based on the inputs used to measure fair value, and expands the required
disclosures about the use of fair value measurements.
Under the guidance, fair value is defined as the price that would be received to sell an asset (or paid to transfer
a liability), or the “exit price.” The fair value hierarchy prioritizes the inputs to valuation techniques used to
measure fair value into levels:
Level 1 – Quoted prices for identical instruments in active markets.
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active, or other inputs that are observable or whose significant value drivers
are observable.
Level 3 – Significant inputs are supported by little or no market activity and are thus unobservable.
As required by the guidance, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. RAND’s assessment of the significance of
particular inputs to the fair value measurement requires judgment and may affect the selection of the hierarchy
level and the valuation itself. RAND’s own creditworthiness has been considered in the fair value measurements
contained herein.
Long-Term Investments – RAND’s portfolio of long-term investments consists of cash/money market funds,
fixed income funds, equity funds, and alternative investments. Quoted market prices are used to determine
fair value for fixed income funds and equity funds when available. All such funds are considered Level 1.
Certain equity funds are not actively traded but the underlying investments have inputs that are observable.
Such funds are considered Level 2. Alternative investments include RAND’s share of private equity funds and
limited partnership arrangements, which are not actively traded. Identical or similar instruments are difficult
to identify as underlying investment components may not be publicly available. Some of these investments
have restrictions that limit RAND’s ability to withdraw funds as specified in the arrangements. Fair value
measurement for alternative investments considers all available information for each investment fund,
including its annual audited financial statements, known activity subsequent to its financial statement date, and
valuation information from the fund manager. All alternative investments are considered Level 3.
Building Project Fund Investments – RAND’s remaining proceeds from its tax-exempt bond issuance are invested
in a money market fund. This fund is considered Level 1.
Derivative Financial Instruments – RAND uses two interest rate swaps to fix the interest rate on its 2008A and
2008B variable rate bonds. Dealer quotes, based on cash flow models discounted at relevant market interest
rates, are used to determine the fair value of the swaps, both of which are considered Level 2.
RAND’s assets and liabilities measured and reported in the financial statements at fair value on a recurring basis
as of September 27, 2009, were as follows (in thousands):
Level 1
Level 2
Level 3
Balance as of
September 27, 2009
Assets
Investments
Cash/Money Market Funds
$
3,762
$
—
Fixed Income Funds
61,102
—
Equity Funds
30,507
—
—
$ 14,256
Alternative Investments
$
—
$
3,762
—
61,102
34,844
—
65,351
—
45,415
45,415
—
$ 14,256
Liabilities
Derivatives
46
$
$
Changes in Level 3 assets measured at fair value on a recurring basis for the fiscal year ended September 27,
2009, were as follows (in thousands):
Beginning
Balance
Alternative Investments
$ 44,387
Realized
and
Unrealized
Gains
(losses)
$
(766)
Purchases
and Sales
$
1,794
Ending Balance
$ 45,415
7.PostretirementBenefitsOtherThanPensions:
In addition to providing certain other retirement benefits, RAND provides health care benefits to certain
employees who retire having met the required age and years of service with RAND. This coverage also applies
to their dependents. Retirees may elect coverage under the Preferred Provider Organization, various HMOs, or
reimbursement of individually purchased Medigap policies. Medicare becomes the primary coverage for retirees
when they reach age 65. Retirees and dependents share substantially in the cost of coverage. RAND retains the
right, subject to existing agreements, to change or eliminate these benefits.
RAND’s retiree medical program includes prescription drug coverage for retirees over age 65 that equals or
exceeds the benefit provided by Medicare. As long as the retirees remain in the Company medical plan rather
than enrolling in the new Medicare prescription drug coverage, Medicare will share the cost of the plan with
the Company and the employees. RAND’s share of the obligations for future retiree medical benefits is reduced
due to this subsidy from Medicare.
The following table sets forth the plan’s funded status as shown in the Consolidated Statements of Financial
Position (in thousands):
September 27, 2009
September 28, 2008
$
$
Changeinbenefitobligation
Benefit obligation at beginning of year
Service cost
Increase due to passage of time
Plan participants’ contributions
Benefits paid
Benefit obligation at end of year
1,319
501
3,446
(3,046)
(1,179)
(1,079)
23,912
Fair value of plan assets at beginning of year
19,088
6,952
7,151
231
Employer contributions
Plan participants’ contributions
Benefits paid
(647)
1,174
1,026
523
501
(1,179)
Fair value of plan assets at end of year
Unfunded obligation
701
1,400
Actual return on plan assets
(1,079)
7,701
$
20,692
634
523
Actuarial loss (gain)
Changeinplanassets
19,088
16,211
6,952
$
12,136
The following table provides the relevant weighted-average assumptions used:
September 27, 2009
September 28, 2008
Discount rate used to determine benefit
obligation
5.50%
7.50%
Discount rate used to determine net periodic
postretirement benefit cost
7.50%
6.50%
Long-term rate of return on plan assets
8.00%
8.00%
47
Assumed health care cost trend rates are as follows:
September 27, 2009
September 28, 2008
Health care cost trend rate assumed for next year
9.50%
9.50%
Rate to which the cost trend rate is assumed
to decline
5.00%
5.00%
2015
2014
Year that the rate reaches the ultimate trend rate
The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the
assumed health care cost trend rate by one percentage point would increase by $339,000 the service cost
and passage-of-time components of the fiscal year 2009 expense and increase by $3,580,000 the accumulated
postretirement benefit obligation as of September 27, 2009. Decreasing the assumed health care cost trend rate
by one percentage point would decrease by $277,000 the service cost and passage-of-time components of the
fiscal year 2009 expense and decrease by $2,954,000 the accumulated postretirement benefit obligation as of
September 27, 2009.
The net periodic postretirement benefit cost for fiscal years ended September 27, 2009, and September 28,
2008, included the following components (in thousands):
2009
Service cost-benefits attributed to service during the
period
$
Increase in the accumulated postretirement benefit
obligation to recognize the effects of the passage
of time
2008
634
$
1,400
Expected return on plan assets
701
1,319
(561)
Recognition of prior service cost and net gain/loss
on amortization
Net periodic postretirement benefit cost
(574)
2
$
1,475
10
$
1,456
As required annually by the authoritative accounting guidance, RAND recorded an adjustment to the accrued
postretirement benefit liability (other than net periodic postretirement benefit cost) in Other items on the
Consolidated Statements of Activities and Changes in Net Assets for the period ended September 27, 2009, a
net loss of $3,774,000. The corresponding adjustment for the period ended September 28, 2008, was a net gain
of $1,834,000. Both adustments were driven by the change to the associated discount rates.
The following benefit payments, which reflect expected future service and Medicare Part D subsidies, as
appropriate, are expected to be paid (in thousands):
2010
Gross Benefit
Payments
Medicare Part
D Subsidies
$
$
912
56
Net Benefit
Payments
$
856
2011
1,018
69
949
2012
1,098
82
1,016
2013
1,160
97
1,063
2014
1,261
109
1,152
Next five years
7,530
745
6,785
Asset allocations at September 27, 2009, and September 28, 2008, by asset category are as follows:
2009
13.5%
10.0%
Shares of bond funds, at fair value
32.2
36.0
Shares of equity funds, at fair value
34.8
34.0
Alternative investments
48
2008
Cash and short term
19.5
20.0
100.0%
100.0%
RAND contributes to a Voluntary Employee Benefit Association irrevocable trust that is used to partially fund
health care benefits for future retirees. In general, retiree health benefits are paid as covered expenses are
incurred.
8. BorrowingArrangements:
RevenueBonds. In 2002, RAND issued $130,000,000 of tax-exempt revenue bonds to finance the construction
of its Santa Monica headquarters facility ($32,500,000 Series 2002A fixed rate and $97,500,000 Series 2002B
variable rate). During fiscal year 2007, RAND refinanced its 2002A fixed rate bonds resulting in the issuance of
$34,975,000 of variable rate tax-exempt revenue bonds (Series 2007) and the defeasance of the original Series
2002A bonds. The proceeds from the Series 2007 bonds, net of issuance costs of $1,006,000, were irrevocably
deposited into an escrow fund and invested in U.S. Treasury Securities in an amount sufficient to service the
principal and interest payments on the Series 2002A bonds through the redemption date of April 1, 2012.
In May 2008, RAND issued $34,575,000 of tax-exempt variable rate revenue bonds (Series 2008A) to refinance
the Series 2007 tax-exempt variable rate revenue bonds. Costs incurred in connection with the issuance of the
Series 2008A bonds of approximately $379,000 were paid by RAND. The initial rate of interest was 1.65% and
annual principal payments ranging from $450,000 to $1,825,000 are due from April 1, 2009 to April 1, 2042.
Included in management and general expenses on the Consolidated Statements of Activities and Changes in
Net Assets for fiscal year 2008 is $935,000, recognized as a loss on extinguishment of the Series 2007 variable
rates bonds.
In June 2008, RAND issued $93,565,000 of tax-exempt variable rate revenue bonds (Series 2008B) to refinance
the Series 2002B tax-exempt variable rate revenue bonds. Included in the par amount of the Series 2008B bonds
was approximately $1,035,000 of costs incurred in connection with issuance. The initial rate of interest was
1.15% and annual principal payments ranging from $1,110,000 to $4,935,000 are due from April 1, 2009 to
April 1, 2042. Included in management and general expenses on the Consolidated Statements of Activities and
Changes in Net Assets for fiscal year 2008 is $2,155,000, recognized as a loss on extinguishment of the Series
2002B variable rate bonds.
The Series 2008A and Series 2008B bonds contain various covenants including compliance with the following
financial measures: maximum debt-to-capitalization ratio, minimum cushion ratio, and minimum debt service
coverage ratio. RAND is in compliance with all covenants as of September 27, 2009.
The payment of principal and interest on both the Series 2008A and Series 2008B bonds is collateralized by
direct-pay letters of credit.
InterestRateSwaps.Concurrent with the issuance of the Series 2007 variable rate bonds, RAND entered into an
interest rate swap agreement with a counterparty whereby RAND agreed to pay the counterparty a fixed rate
of interest of 3.955% and the counterparty agreed to pay RAND the Series 2007 variable rate until April 1, 2012,
and 67% of one-month LIBOR thereafter. Simultaneously, RAND entered into an additional interest rate swap
agreement with another counterparty for $42,350,000 of its Series 2002B variable rate bonds whereby RAND
agreed to pay the counterparty a fixed rate of interest of 3.955% and the counterparty agreed to pay RAND
67% of one-month LIBOR. Both swaps remain in effect with the new Series 2008A and Series 2008B bonds, with
the same terms (except the first counterparty has agreed to pay RAND the Series 2008A variable rate in place
of the Series 2007 variable rate) and terminate on April 1, 2042, the maturity date of the Series 2008A and
Series 2008B bonds. Included in Other items on the Consolidated Statements of Activities and Changes in Net
Assets and in Other long-term liabilities on the Consolidated Statements of Financial Position is $6,186,000 and
$4,445,000, for fiscal years 2009 and 2008, respectively, recognized as the change in fair value of these derivative
instruments.
49
Long-term debt is as follows (in thousands):
September 27,
2009
California Infrastructure and Economic Development Bank Variable Rate Revenue
Bonds, Series 2008A, issued in the original principal amount of $34,575,000,
in connection with the refunding of the Series 2007 bonds, in May 2008;
average interest rate of 0.66% and 1.85% for the fiscal years ending September
27, 2009, and September 28, 2008, respectively; annual principal payments
ranging from $450,000 to $1,825,000, beginning April 1, 2009, and ending
April 1, 2042
$
California Infrastructure and Economic Development Bank Variable Rate Revenue
Bonds, Series 2008B, issued in the original principal amount of $93,565,000,
in connection with the refunding of the Series 2002B bonds, in June 2008;
average interest rate of 0.40% and 1.96% for the fiscal years ending September
27, 2009, and September 28, 2008, respectively; annual principal payments
ranging from $1,110,000 to $4,935,000, beginning April 1, 2009, and ending
April 1, 2042
Less current portion
$
34,125
September 28,
2008
$
34,575
92,455
93,565
126,580
(1,845)
128,140
(1,560)
124,735
$
126,580
Annual bond principal payments are required in the following fiscal years (in thousands):
2010
2011
2012
2013
2014
Thereafter
$
1,845
1,930
2,005
2,130
2,215
116,455
$
126,580
Accrued interest payable relating to the bonds was $256,000 and $454,000 as of September 27, 2009, and
September 28, 2008, respectively. RAND’s total interest expense was $3,109,000 and $4,814,000 for the fiscal
years ended September 27, 2009, and September 28, 2008, respectively. The fair value of RAND’s revenue bonds
approximates par value as all of RAND’s revenue bonds are variable rate bonds.
LineofCredit. RAND has an uncollateralized line of credit in the principal amount of $18,000,000 at September
27, 2009, which expires in August 2010. The line of credit contains covenants that require RAND to achieve the
same financial measures as the Series 2008A and 2008B revenue bonds. There were no amounts outstanding
at September 27, 2009, and September 28, 2008. Under the terms of the credit agreement, interest is payable
monthly at (i) the prime rate less .75 percent, (ii) the LIBOR rate plus 1.5 percent, or (iii) the IBOR rate plus 1.5
percent as selected by RAND. No amounts were drawn on the line of credit agreement in fiscal years 2009 or
2008.
9. CommitmentsandContingencies:
Lease Commitments. Operating lease commitments, net of $4,807,000 representing subleases, are as follows
(in thousands):
2010
2011
2012
2013
2014
Thereafter
$
8,211
8,778
8,557
8,446
8,233
7,120
$
49,345
Future minimum rentals are comprised of office and equipment leases. Certain of RAND’s office
leases contain rent escalation clauses and fair-market renewal options. All property leases generally
require RAND to pay for utilities, insurance, taxes, and maintenance. RAND’s net rental expense was
$7,967,000 and $7,358,000 for the fiscal years ended September 27, 2009, and September 28, 2008, respectively.
50
OtherCommitments.Contract costs billed to government clients are subject to audit by the Defense Contract
Audit Agency (“DCAA”). Resulting indirect cost adjustments, if any, are prorated to all contracts. Contract costs
billed prior to September 28, 2008, have been audited and accepted. To date, there have been no significant
cost disallowances. In the opinion of management, contract costs billed subsequent to September 28, 2008,
are allowable, and any potential cost disallowance would not materially affect RAND’s consolidated financial
position, results of operations, or cash flows.
RAND has certain contingent liabilities with respect to claims arising from the ordinary course of business. In
the opinion of management, such contingent liabilities will not result in any loss that would materially affect
RAND’s financial position, results of operations, or cash flows.
EnvironmentalRemediation. Under the terms of an agreement with the City of Santa Monica (the “City”) for
the sale of land owned by RAND, RAND was responsible for the demolition of existing buildings on the site
and environmental remediation with respect to the underlying land. Under the terms of the agreement with
the City, RAND must indemnify the City for claims related to the presence of hazardous materials at the site
for a period until ten years after the demolition of the old buildings and completion of soil and groundwater
remediation. There can be no assurance that future claims for indemnity will not have a material adverse effect
on RAND’s consolidated statements of activities or of cash flows.
10.Endowment:
RAND’s endowment consists of approximately 30 individual funds established for a variety of purposes. It
has both donor-restricted endowment funds and funds designated by the Board of Trustees to function as
endowment funds. As required by GAAP, net assets associated with endowment funds are classified and
reported based on the existence or absence of donor-imposed restrictions.
Absent explicit donor stipulations to the contrary, RAND classifies as permanently restricted net assets the
original value of gifts donated to the permanent endowment. The remaining portion of the donor-restricted
endowment fund that is not classified as permanently restricted—all investment earnings and temporarily
restricted gifts—is classified as temporarily restricted until those amounts are appropriated for expenditure
by RAND in a manner consistent with the standard of prudence prescribed by UPMIFA (see also Note 2, New
Accounting Pronouncements).
The following table summarizes the components of the endowment by net asset class as of September 27, 2009:
Unrestricted
Donor-restricted funds
$
Board-designated funds
End of year
—
Temporarily
Restricted
Permanently
Restricted
$
$
9,018
122,682
$
122,682
42,816
—
$
9,018
Total
$
—
$
42,816
51,834
122,682
$
174,516
The following table summarizes the activity in the endowment during fiscal year 2009:
Unrestricted
Beginning of year
$
Investment return
137,149
Temporarily
Restricted
$
(2,572)
Contributions
—
4,478
Permanently
Restricted
$
42,125
Total
$
183,752
2,865
—
293
50
691
741
Appropriations
(7,815)
(2,455)
—
Other changes—UPMIFA
(4,262)
4,262
—
—
—
—
Other changes—net asset transfer
End of year
182
$
122,682
(182)
$
9,018
$
42,816
(10,270)
$
174,516
InvestmentandSpendingPolicies.RAND’s investment and spending policies are in compliance with UPMIFA.
In accordance with UPMIFA, RAND considers the following factors in making a determination to appropriate
or accumulate donor-restricted endowment funds: the duration and preservation of the fund, the mission of
RAND, general economic conditions, the possible effect of inflation and deflation, the expected total return
from income and the appreciation of investments, the investment policies of the organization, and RAND’s
other resources.
51
Per RAND’s investment policy, endowment assets are invested in a manner that is intended to produce results
that exceed the Employment Cost Index plus 5.5%. RAND relies on a total return strategy in which investment
returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and
dividends). RAND targets a diversified asset allocation to achieve its long-term return objectives within prudent
risk constraints.
Per RAND’s spending policy, a percentage of its endowment fund’s average fair value over the prior 12 quarters
through June 30 is appropriated for distribution each year. In establishing this policy, RAND considered the longterm expected return on its endowment. Accordingly, over the long term, RAND expects the current spending
policy to allow its endowment to grow at a rate equal to or in excess of inflation.
FundswithDeficiencies. From time to time, the fair value of assets associated with individual donor-restricted
endowment funds may fall below the level that the donor or UPMIFA requires RAND to retain as a fund of
perpetual duration. In accordance with GAAP, deficiencies of this nature that are reported in unrestricted net
assets were $1,913,000 and $2,096,000 as of September 27, 2009, and September 28, 2008, respectively (see also
Note 2, Net Asset Transfers). These deficiencies resulted from unfavorable market fluctuations that occurred
shortly after the investment of new permanently restricted contributions and continued appropriation for
certain programs that was deemed prudent by the Board of Trustees.
11. NetAssets:
Board-DesignatedNetAssets. Board-designated net assets (net of cumulative net asset transfers) are available
for the following purposes (in thousands):
September 27, 2009
Designated for investment
$
104,901
September 28, 2008
$
117,187
Designated for special use:
RAND Education
3,235
3,332
National Security Research and Training
—
2,486
RAND Institute for Civil Justice
—
1,728
251
1,517
3,486
9,063
Other
$
108,387
$
126,250
TemporarilyRestrictedNetAssets. Temporarily restricted net assets (both within and outside of the endowment
and including net asset transfers) are available for the following purposes (in thousands):
September 27, 2009
National Security Research and Training
$
$
1,202
Pardee RAND Graduate School
2,506
2,849
RAND Institute for Civil Justice
1,811
638
President’s Fund
1,616
1,712
RAND Center for Middle East Public Policy
1,262
2,554
Bing Center for Health Economics
1,043
1,288
RAND Health
921
1,181
RAND Center for Asia Pacific Policy
689
1,201
499
1,077
5,345
4,283
RAND Center for Russia and Eurasia
Other
$
52
3,181
September 28, 2008
18,873
$
17,985
PermanentlyRestrictedNetAssets. Permanently restricted assets (including pledges) are shown below by the
purpose designated by the donor. The assets are invested in perpetuity and the income is available to support
the restricted activities (in thousands):
September 27, 2009
September 28, 2008
Pardee RAND Graduate School
General support
$
Awards and scholarships
12,585
$
12,478
3,435
3,211
National Security Research and Training
4,500
4,500
RAND Institute for Civil Justice
4,134
4,134
RAND Pardee Center for Longer Range Global Policy
3,670
3,670
RAND—general support
3,565
3,565
Tang Institute for U.S.–China Relations
3,000
3,000
Samueli Institute Fund for Policy Studies in Integrative Medicine at RAND
3,000
3,000
Paul O’Neill Alcoa Professorship in Policy Analysis
2,479
2,479
Research Position Endowment
1,500
1,500
Korea Chair
1,045
—
771
771
Other
$
43,684
$
42,308
12. Employee Retirement Plans:
RAND has four defined contribution employee plans: a Qualified Retirement Plan (“QRP”), a Supplemental
Retirement Annuity Plan (“SRAP”), a Nonqualified Deferred Compensation Plan (“NDCP”), and a Nonqualified
Supplementary Plan (“NSP”). Most full-time, regular employees are eligible to participate in the QRP and SRAP.
Certain employees are eligible to participate in the NSP and NDCP. RAND has reserved the right to terminate
the plans at any time, but in such an event, the benefits already purchased by the participant and contributions
already made by RAND would not be affected. The QRP and the NSP are entirely RAND-financed. RAND’s
contributions to the Plans for eligible employees range from 5 percent to 14 percent of salaries, depending on
the level of wages and age of the participating employee. RAND’s contributions to the QRP vest at the earlier
of retirement or four years of service. Vesting begins after two years of service and increases weekly to 100
percent at the end of four years of service. The NSP and NDCP vest under various conditions specified in the
plan. All contributions made by RAND are charged to operations. RAND’s contributions were $10,751,000 and
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53
References
To find out more about the
2009 research or activities
highlighted on pages
4–15, see the following
publications—available,
unless otherwise noted, at
www.rand.org.
Healthy Societies
RAND COMPARE:
www.randcompare.org/
“How Well Did Health
Departments Communicate
About Risk at the Start of
the Swine Flu Epidemic in
2009?” Jeanne S. Ringel,
Elizabeth Trentacost,
and Nicole Lurie, Health
Affairs, Vol. 28, No. 4, pp.
w743–w750
“Will Routine Annual
Influenza Prevention and
Control Systems Serve
the United States Well in
a Pandemic?” Jeanne S.
Ringel, Melinda Moore, John
Zambrano, and Nicole Lurie,
Disaster Medicine and Public
Health Preparedness, Vol. 3,
Supp. 2, pp. s160–s165
“Associations Between
Structural Capabilities of
Primary Care Practices and
Performance on Selected
Quality Measures,” Mark
W. Friedberg, Kathryn L.
Coltin, Dana Gelb Safran,
Marguerite Dresser, Alan
M. Zaslavsky, and Eric C.
Schneider, Annals of Internal
Medicine, Vol. 151, No. 7, pp.
456–463
The Economic Cost of
Methamphetamine Use in the
United States, 2005, Nancy
Nicosia, Rosalie Liccardo
Pacula, Beau Kilmer, Russell
Lundberg, and James
Chiesa, RAND Corporation,
2009
54
Investing in People and Ideas
Study on the Requirements
and Options for Radio
Frequency Identification
(RFID) Application in
Healthcare—Final Report,
Constantijn van OranjeNassau, Helen Rebecca
Schindler, Lorenzo Valeri,
Anna-Marie Vilamovska, Evi
Hatziandreu, and Annalijn
Conklin, RAND Corporation,
2009
China: Self-Perception vs.
Outside Perception, Michael
J. Lostumbo, World Journal,
October 2, 2009
Improving Accountability
in Public Education, Brian
M. Stecher and Jennifer Li,
RAND Corporation, 2009
China’s International
Behavior: Activism,
Opportunism,
and Diversification,
Evan S. Medeiros,
RAND Corporation, 2009
Increasing Participation
in No Child Left Behind
School Choice, Georges
Vernez and Jennifer Li,
RAND Corporation, 2009
“Potential Societal Savings
from Reduced Sodium
Consumption in the U.S.
Adult Population,” Kartika
Palar and Roland Sturm,
American Journal of Health
Promotion, Vol. 24, No. 1, pp.
49–57
Children & Families
“Variations in Disaster
Preparedness by Mental
Health, Perceived General
Health, and Disability
Status,” David P. Eisenman,
Qiong Zhou, Michael Ong,
Steven Asch, Deborah Glik,
and Anna Long, Disaster
Medicine and Public Health
Preparedness, Vol. 3, No. 1,
pp. 33–41
Strategy & Diplomacy
Dangerous But Not
Omnipotent: Exploring the
Reach and Limitations of
Iranian Power in the Middle
East, Frederic Wehrey, David
E. Thaler, Nora Bensahel,
Kim Cragin, Jerrold D.
Green, Dalia Dassa Kaye,
Nadia Oweidat,
and Jennifer Li,
RAND Corporation, 2009
Charter Schools in
Eight States: Effects on
Achievement, Attainment,
Integration, and Competition,
Ron Zimmer, Brian Gill,
Kevin Booker, Stephane
Lavertu, Tim R. Sass,
and John Witte,
RAND Corporation, 2009
“Children on the Homefront:
The Experience of Children
from Military Families,” Anita
Chandra, Sandraluz LaraCinisomo, Lisa H. Jaycox,
Terri Tanielian, Rachel M.
Burns, Teague Ruder, and
Bing Han, Pediatrics, [EPub
Dec 7, 2009]
“Timing of Parent and
Child Communication
About Sexuality Relative to
Children’s Sexual Behaviors,”
Megan K. Beckett, Marc N.
Elliott, Steven Martino, David
E. Kanouse, Rosalie Corona,
David J. Klein, and Mark A.
Schuster, Pediatrics, Vol. 125,
pp. 33–41
Reparable Harm: Assessing
and Addressing Disparities
Faced by Boys and Men of
Color in California, Lois M.
Davis, M. Rebecca Kilburn,
and Dana J. Schultz,
RAND Corporation, 2009
Designing Effective Payfor-Performance in K–12
Education, Laura Hamilton
and Jennifer Li,
RAND Corporation, 2009
Promoting Effective Preschool
Programs, Lynn Karoly, Gail
Zellman, and Jennifer Li,
RAND Corporation, 2009
The Role of Charter Schools
in Improving Education,
Susan Bodilly and Jennifer
Li, RAND Corporation, 2009
Implementation of the K–12
Education Reform in Qatar’s
Schools, Gail L. Zellman,
Gery W. Ryan, Rita Karam,
Louay Constant, Hanine
Salem, Gabriella Gonzalez,
Nate Orr, Charles A.
Goldman, Hessa Al-Thani,
and Kholode Al-Obaidli,
RAND Corporation, 2009
“Racial/Ethnic Differences
in Teen and Parent
Perspectives Toward
Depression Treatment,”
Anita Chandra, Molly M.
Scott, Lisa H. Jaycox, Lisa S.
Meredith, Terri Tanielian, and
Audrey Burnam, Journal of
Adolescent Health, Vol. 44,
No. 6, pp. 546–553
“Impact of Teen Depression
on Academic, Social, and
Physical Functioning,” Lisa
H. Jaycox, Bradley D. Stein,
Susan Paddock, Jeremy N.
V. Miles, Anita Chandra, Lisa
S. Meredith, Terri Tanielian,
Scot Hickey, and M. Audrey
Burnam, Pediatrics, Vol. 124,
No. 4, pp. e596–e605
“Perceived Barriers to
Treatment for Adolescent
Depression,” Lisa S.
Meredith, Bradley D. Stein,
Susan M. Paddock, Lisa H.
Jaycox, Virginia P. Quinn,
Anita Chandra, and Audrey
Burnam, Medical Care, Vol.
47, No. 6, pp. 677–685
“Improving Treatment
Seeking Among Adolescents
with Depression:
Understanding Readiness
for Treatment,” Terri Tanielian,
Lisa H. Jaycox, Susan M.
Paddock, Anita Chandra,
Lisa S. Meredith, and M.
Audrey Burnam, Journal of
Adolescent Health, Vol. 44,
No. 5, pp. 490–498
Energy & Environment
Natural Gas and Israel’s
Energy Future: Near-Term
Decisions from a Strategic
Perspective, Steven W.
Popper, Claude Berrebi,
James Griffin, Thomas
Light, Endy Y. Min, and Keith
Crane, RAND Corporation,
2009
Improving the Energy
Performance of Buildings:
Learning from the European
Union and Australia,
Charles P. Ries, Joseph
Jenkins, and Oliver Wise,
RAND Corporation, 2009
Near-Term Feasibility of
Alternative Jet Fuels, James
I. Hileman, David S. Ortiz,
James T. Bartis, Hsin Min
Wong, Pearl E. Donohoo,
Malcolm A. Weiss, and Ian
A. Waitz, RAND Corporation,
2009
Imported Oil and U.S.
National Security, Keith
Crane, Andreas Goldthau,
Michael Toman, Thomas
Light, Stuart E. Johnson,
Alireza Nader, Angel
Rabasa, and Harun Dogo,
RAND Corporation, 2009
Research Priorities for Fossil
Fuels, James T. Bartis,
RAND Corporation, 2009
Looking Back on Looking
Forward: A Review of
Evaluative Scenario
Literature, European
Environment Agency
technical report based
on a study by Robert
Lempert, Michael
Hallsworth, Stijn Hoorens,
and Tom Ling
The Global Technology
Revolution China, In-Depth
Analyses: Emerging
Technology Opportunities
for the Tianjin Binhai New
Area (TBNA) and the Tianjin
Economic-Technological
Development Area (TEDA),
Richard Silberglitt and Anny
Wong, with S. R. Bohandy,
Brian G. Chow, Noreen
Clancy, Scott Hassell, David
R. Howell, Gregory S. Jones,
Eric Landree, and Parry
Norling, RAND Corporation,
2009
Conflict & Stability
Global Recession
Withdrawing from Iraq:
Alternative Schedules,
Associated Risks, and
Mitigating Strategies, Walter
L. Perry, Stuart E. Johnson,
Keith Crane, David C.
Gompert, John Gordon
IV, Robert E. Hunter, Dalia
Dassa Kaye, Terrence K.
Kelly, Eric Peltz, and
Howard J. Shatz,
RAND Corporation, 2009
Helping Each Other in
Times of Need: Financial
Help as a Means of Coping
with the Economic Crisis,
Susann Rohwedder,
RAND Corporation, 2009
In the Graveyard of
Empires: America’s War in
Afghanistan, Seth G.
Jones, W.W. Norton &
Company, Inc., 2009
Security in Mexico:
Implications for U.S. Policy
Options, Agnes Gereben
Schaefer, Benjamin Bahney,
and K. Jack Riley,
RAND Corporation, 2009
Reconstruction Under Fire:
Unifying Civil and Military
Counterinsurgency, David
C. Gompert, Terrence
K. Kelly, Brooke Stearns
Lawson, Michelle Parker, and
Kimberly Colloton,
RAND Corporation, 2009
The Long March: Building
an Afghan National Army,
Obaid Younossi, Peter
Dahl Thruelsen, Jonathan
Vaccaro, Jerry M. Sollinger,
and Brian Grady,
RAND Corporation, 2009
U.S.-U.K. Conference
on Behavioral Finance
and Public Policy, RAND
Behavioral Finance Forum,
http://www.rand.org/
pubs/conf_proceedings/
CF264/#welcome_and_
opening_remarks
Perspectives of Chief Ethics
and Compliance Officers
on the Detection and
Prevention of Corporate
Misdeeds: What the Policy
Community Should Know,
Michael D. Greenberg,
RAND Corporation, 2009
International Conference
on Entrepreneurship—
Catalysts of
Entrepreneurship: Policies
for Growth, Elizabeth D.
Brown, Amy R. Coombe,
Fred Kipperman, Krishna B.
Kumar, Tewodaj Mengistu,
Arnab Mukherji, Neeraj
Sood, and Joanne K.
Yoong, RAND Corporation,
2009
Corporations and
Counterinsurgency, William
Rosenau, Peter Chalk, Renny
McPherson, Michelle Parker,
and Austin Long,
RAND Corporation, 2009
Investing in People and Ideas
55
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