Lack of Diversity, Transparency Across Charitable Foundations
An article Feb. 12 detailing a new report by the John S. and James L. Knight Foundation revealed that a selection of the top U.S. charitable foundations have an estimated $8.62 billion, or 13.5% of assets, invested with women- and/or minority-owned money managers.
While the study showed some good news — that charitable endowments are outperforming the industry in the representation of diversely owned managers — it also revealed a disturbing lack of transparency.
Only 26 of the top 50 U.S. charitable foundations either participated or had public data available for the report. Among those that declined to participate are some of the nation's biggest and best-known foundations: The Ford Foundation, J. Paul Getty Trust, the Chan Zuckerberg Initiative, The Conrad N. Hilton Foundation and many others.
What we know is this: Of the $70 trillion in the asset management business, only 1.3% is managed by women and underrepresented minority-owned firms.
With public accountability often comes a greater commitment to human rights and social equity in the investment process, a cornerstone of Robert F. Kennedy Human Rights' Compass Investor Program.
When the Knight Foundation was publicly asked in 2010 how much of its $2.1 billion endowment was invested by asset managers whose ownership included people of color or women, executives were surprised to find the number as low as $7.5 million. Today, the answer is $805 million, more than a third of its current endowment.
Shining a light on a lack of diversity and inclusion among foundations, sovereign wealth funds, pension funds and university endowments does more than reveal inconsistencies between mission and practice. It ensures these foundations' dollars are leveraged for the greatest impact.
It's time for others to speak up, and commit to expanding the pool over the next five years.
“Of the $70 trillion in the asset management business, only 1.3% is managed by women and underrepresented minority-owned firms.”
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