As an endowed foundation we are trying to address the historic paradigm that still dominates philanthropy today: make as much money as possible by investing in any profitable business no matter its social and environmental costs and then give away five percent in grants to “do good” in the world. That approach, as many agree, is not enough. Foundations need to be as committed and mission focused in investing their endowments based on ethical and principled social values as they are in making grants. Values-driven investing is relatively unexplored territory for philanthropy and its lack is a huge ethics and accountability oversight in our field of practice.
We view money as a tool and aspire to be responsive in our grantmaking and creative in our investments. Swift Foundation’s approach to investing is to apply a continuum approach across the spectrum of grants to investments. This means we communicate openly and regularly among investment and program staff, and pay attention to the intersection of grants and investments. We understand that visionary companies committed to high ethical priorities and working in underserved communities often require additional grant support. Furthermore, the nonprofit organizations we work with sometimes need access to low-interest rate loans to maximize their results.
While we are committed to the foundation’s future, we are not trying to grow the endowment exponentially if it would mean compromising our values in order to make more money. We have decided to maintain about 85% ($50 million) of the foundation’s $60 million endowment in perpetuity and have assigned $10 million to the Transitional Portfolio.
To that end, we have retained Manchester Capital to invest the Core Portfolio towards maintaining the endowment’s current size. Growth beyond the $50 million in the Core Portfolio can be re-allocated to the Transitional Portfolio once the grants and administrative costs are covered. Likewise, when investments in the Transitional Portfolio have long enough track records and consistent returns in their asset class they are then moved into the Core Portfolio.