Foundations Forge Ahead: DEI and Investing

November 26, 2019

Behind every great foundation is… a lot of money. We know those funds have to be invested to generate returns that pay for grants and operations. But can the money at the heart of the foundation business model be responsive to a foundation’s important values of diversity, equity and inclusion (DEI)?

The answer to this question is yes. You can read all about it our new report Forging Ahead: Diversity, Equity and Inclusion in Foundation Investing Activities.

We interviewed executives at eight large foundations that have embraced organization-wide DEI efforts. We asked them how DEI can shape the structure of the investing department, the work of investment committees and investment choices.

Our conversations naturally led to the broad topic of privilege and power related to foundation investing. We heard about the issue of equity between program and investment staff, and about bringing mission topics into investment committees.

Dr. Robert Ross, CEO of The California Endowment, tells us, “The investments arena has been the last and toughest hill to climb, kind of like the 25th mile in a marathon. The talent pool and pipeline is overwhelmingly white and male, our DEI ethos plays less well with investing managers.”

Amy Jensen, the investment director at Northwest Area Foundation, discusses stringent foundation investment policies, “The traditional investing standards simply reinforce going with the herd, and absolutely keep investors from hiring women and people of color.”

We are so grateful to our participants: CEOs and senior investing staff members at The California Endowment, The California Wellness Foundation, Casey Family Programs, Colorado Health Foundation, Heising-Simons Foundation, McKnight Foundation, Northwest Area Foundation and Surdna Foundation.

While it is humbling and inspiring to hear what investing staff are doing around DEI, we also learned that a lot of work remains. This first wave of practitioners indicates that they are just scratching the surface of addressing power and privilege in the investment sector.

Stay tuned – we are certain this conversation is just beginning, and we would love to have you join us.

An Executive in Residence at Philanthropy Northwest as well as a Senior Advisor with The Giving Practice, Rosalie Sheehy Cates works with foundation trustees and executive staff to solve investing issues and set up impact investing programs. Group Health Foundation generously funded the development of this report.