Sept. 16 (Bloomberg) -- Charles Best, founder of the New York-based nonprofit DonorsChoose, sat in his garment district office yesterday and contemplated the loss of his biggest corporate benefactor after the bankruptcy of Lehman Brothers Holdings Inc.

``Lehman's support has been a pillar of our growth,'' said Best, 32, adding: ``It certainly doesn't mean the end of our organization.''

The Lehman Brothers Foundation gave DonorsChoose $500,000 each of the past three years, or 7 percent of its most recent operating budget. It pledged another $500,000 for 2009. Best said the money was key to the national expansion of his 8-year-old organization, which enables individuals to fund projects proposed by public school teachers.

DonorsChoose is one of more than 200 nonprofits that Lehman aids each year. Through corporate contributions and grants from its U.S. and European foundations, it distributed $39 million in the 12 months ended in November 2007, according to Lehman's Web site.

Melissa Berman, chief executive of Rockefeller Philanthropy Advisors, which advises individuals and corporations about giving away money, said the foundation must close -- eventually -- because it no longer has a corporation sustaining it. Yet its assets are protected from creditors, she said.

``If a foundation has a very generous endowment, it can sustain itself for another five years,'' she said.

As of Nov. 30, 2006, the Lehman Brothers Foundation had assets of $20.9 million, according to its tax return posted on guidestar.com. Francine Kittredge, who is listed on the return as the foundation's president, didn't return calls. Lehman spokesman Mark Lane declined to comment.

Food Programs, Schools

Recent New York-based beneficiaries of the foundation include City Harvest, which delivers excess food from restaurants and other businesses to food programs; the Fund for Public Schools, which provides private investment in public schools; and the Robin Hood Foundation, which funds a variety of New York City programs and counts financial titans on its board including Lehman Chief Executive Officer Richard Fuld.

``The philanthropy of Lehman Brothers has been very savvy and focused,'' Berman said. ``It will leave a gap for New York City.''

Lehman has also pledged $10 million to Spellman College through 2011. The grant at the historically black women's college in Atlanta is to create a new curriculum with the aim of increasing the number of women in financial services. A Spellman spokeswoman didn't return calls.

Employee Recommendations

Lehman says on its Web site that 82 percent of its 2007 foundation grants went to organizations recommended by Lehman employees. Best said Jonathan Beyman, a former Lehman chief of operations and technology, heard about DonorsChoose in a public radio report about four years ago.

``He got addicted to donating to DonorsChoose projects,'' Best said. ``He would fund a classroom project whenever he had 30 seconds.''

Beyman introduced the Lehman philanthropy staffers to the organization.

``They didn't just throw money at it because I was a senior guy there and thought it was a good idea,'' said Beyman, 52, who today is on the board of DonorsChoose and works at Citigroup Inc. ``They did a lot of due diligence.''

The Lehman Foundation has given $375,000 over the past three years to Doctors Without Borders, the international humanitarian organization. Development director Jennifer Tierney said it has 550,000 active donors in the U.S.

``When we see one big funder in financial trouble, it's especially important that individuals continue their giving,'' she said.

Tierney acknowledged that in tumultuous times, ``individuals are pulling back their giving as well.''

To contact the reporter on this story: Philip Boroff in New York at pboroff@bloomberg.net.

Last Updated: September 16, 2008 11:35 EDT