WE MUST ADDRESS POWER
TO ACHIEVE REAL IMPACT:
A Letter to Peer Funders
Nathan Cummings frequently said that “nothing will ever be attempted if all possible objections must be first overcome.” That entrepreneurial guidance served us well in November 2017, when our Board took a major leap of faith to advance our mission of creating a more just, vibrant, sustainable, and democratic society.
Breaking from foundations’ longstanding practice of using only about 5 percent of their assets (their grants budget) to advance their mission, we committed to deploying 100 percent of our assets (our grants and financial investments) in service of our mission.
We made this unanimous decision for a number of reasons. We didn’t want to invest in the companies that cause harm in the communities we serve. Why give with one hand while taking away with the other? Instead, we wanted to make investments that could amplify the work of our grantees. Why use only a portion of our assets for impact when we could use them all?
Most important of all, we determined there was no way we could claim to be focused on transforming systems that are neither sustainable nor fair if we didn’t lend our weight and voice to altering the status quo in America’s enormously influential financial markets. They have profound impact on the issues and communities we care about. Philanthropic institutions like ours are products of, and active participants in, these markets. Impact investing is about how we participate — how we show up and change these systems from within.
As a result, we looked at every aspect of how we invest. We started by removing investments that held positions in companies that were causing harm to people or the planet. Then we began shifting increasingly large portions of our assets into a) companies that actively seek to benefit a broad range of stakeholders and b) those that meet the even-higher bar of helping to solve systemic challenges.
Then we realized we had to go deeper. To be true disrupters of the status quo, we had to look at not only those who would receive our capital but also all of those professionals involved in allocating it. Far too few foundations think about the race and background of the investment advisors and fund managers making decisions about their endowment resources — how these managers make their decisions and how they impact economic power within our communities. Yet, such decisions govern the vast majority of philanthropic capital at work in our society today. Given our focus on racial and economic justice, why not make these questions both visible and indispensable?
Now you might be asking yourself, “What about your financial returns? How much have you had to sacrifice on the altar of your values?”
Thanks to the skill and dedication of our investment advisors, our new investment approach has not required any financial sacrifice. None. We believe that our new mission-aligned strategy produced stronger returns than our traditional approach would have despite all of the challenges in 2020. Our research had convinced us this would be the case over the long term. We are pleased to see it proving out in the short term as well.
In this report, we will share all the details of this journey with you, including the things that we wrestled with and had to learn the hard way, as we want to help others learn from our successes and missteps.
Three years into that journey, we can say, unequivocally, that we made the right decision. We’ve learned that the value proposition — and values proposition — for impact investing is even clearer than we knew. We hope that you’ll consider joining us.
Jaimie Mayer, Board Chair
Rey Ramsey, Interim Chief Executive Officer