Women and minorities manage 17% of the assets of large foundations | News from USA®


By ALEX DANIELS from The Chronicle of Philanthropy, Chronicle of Philanthropy

Less than 20% of assets held by large foundations are invested by outside companies run by women or people of color, according to a report released Thursday.

Commissioned by the Knight Foundation, the report found that 30 of the largest donors have deployed a total of $ 11 billion, or 16.6% of their endowment investments, with businesses controlled by women or people of color.

There are many advantages to using a diverse group of investment managers, said Juan Martinez, Chief Financial Officer of Knight. Various investment managers often invest money in investments that white money managers do not, which can add balance to an investment portfolio. And, he said, paying a variety of asset managers had the benefit of creating wealth among finance professionals who encountered obstacles to success.

In a previous study into the broader field of asset management, Knight found that less than 1% of the roughly $ 70 trillion in assets under management in the United States were managed by various asset management companies. .

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“This sector invests with various managers at a much higher rate than the entire domain,” Martinez said. “But the overall scope is pretty paltry.”

Four funders, Casey Family Programs, Knight Foundation, Silicon Valley Community Foundation, and Tulsa Community Foundation / George Kaiser Family Foundation, each had more than a third of their assets managed by a diversified investment firm. The Tulsa and Kaiser Foundations are separate entities, but George Kaiser is a major donor to the Tulsa Community Foundation. Knight commissioned a similar study last year. This report cannot be directly compared to data from last year, however, as the two studies used different definitions of diversified ownership. In the previous study, an investment firm was considered diverse if it had at least one partner who was a woman or a person of color. The diverse ownership bar in this study was raised to 50% ownership by women or people of color.

If the current diversified ownership threshold had been applied to the 25 foundations that participated last year, investments managed by diversified ownership companies would have increased by 1% this year.

The study, conducted by data research firm Global Economics Group, attempted to compile investment data from the 55 largest private, community and operational foundations in the country. As was the case last year, several foundations refused to participate or did not respond to requests for information.

Eight of the donors who declined to participate have their own internal investment teams. The Robert W. Woodruff Foundation, for example, wrote in the comments accompanying the report that it favors “passive strategies and low-cost index replication” that do not require extensive use of external asset managers. .

The Gates Foundation, the largest private philanthropy in the United States with around $ 50 billion in assets, participated, but the study did not identify any assets that the foundation had directed to investment managers led by women or people of color. The foundation only uses external asset managers for “part” of its investment portfolio, the foundation said in comments included in the study.

“While we are grateful that the study draws attention to this very important issue, it does not accurately capture how we manage our portfolio or our commitment to women and minority asset managers.” , wrote the foundation.

The increase in the number of foundations that have responded is a good sign, Knight’s Martinez said.

“They were ready to share data, which we believe is a first step in really addressing this problem in any meaningful way.”

Robert Raben, executive director of the Diverse Asset Managers Initiative, said the foundations had done a poor job of providing data on the diversity of their investment consultants. The initiative is supported by wealthy donors and foundations, including the Ford Foundation and the Rockefeller Brothers Fund, Raben said. The Knight study and the increased participation of larger foundations could encourage more funders to be more open about their diversity efforts.

Raben said, “In a rapidly diversifying country, the opaque, high-stakes, high-dollar realm of asset management is a stubborn reluctant.”

This article was provided to The Associated Press by the Chronicle of Philanthropy. Alex Daniels is a senior reporter at The Chronicle. Email: [email protected] The AP and The Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofit organizations. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropic coverage, visit https://apnews.com/hub/philanthropy.

Copyright 2021 The Associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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