Endowments Investing In Women, Minorities

The nation’s largest foundations invest, on average, between 9 and 14 percent of assets with women- or minority-owned investment firms, according to a new report. “Diversity of Asset Managers,” a study released by The John S. and James L. Knight Foundation, assesses representation of women and racial or ethnic minorities among investment firms used by the largest foundations in America.

The Knight Foundation asked Global Economics Group to assess representation of diverse asset managers among foundations. The top 50 foundations collectively hold $290.32 billion in total assets, across 39 independent foundations, seven community foundations, and four operating foundations.

The study examined available endowment investment data for 26 of the top 50 foundations, and included only endowment investments managed by firms based in the United States. The invested assets amounted to almost $64 billion.

Overall, the study found that:

  • 13.5 percent, $8.62 billion, was invested in “diversely-owned” investment firms;
  • 10.7 percent, $6.82 billion, was invested with women-owned firms; and,
  • 9.3 percent, $5.93 billion, was invested with minority-owned firms.

Half of the $8.62 billion is invested with firms that are both women- and minority-owned, thus, the sum of the two figures is more than $8.62 billion.

The average foundation invests some 13.3 percent of assets in diversely-owned firms, 10.8 percent in women-owned firms, and 9 percent in minority-owned firms. The median foundation invests 13.5 percent in diversely-owned firms, 10.9 percent in women-owned firms, and 7.9 percent in minority-owned firms.

The Knight Foundation, with $2.32 billion in total assets, consistently had among the highest percentages in each category among the foundations: 30 percent managed by women-owned firms, 40 percent managed by minority-owned firms, and almost 46 percent managed by diversely-owned firms.

The largest foundation with among the highest percentages was The Robert Wood Johnson Foundation (RWJF): 21.3 percent managed by women-owned firms, 19.1 percent managed by minority-owned firms, and 26.6 percent managed by diversely-owned firms.

Of the 24 foundations’ investment data not included in the study, 16 had insufficient publicly available data and declined to participate for a variety of reasons, including contractual nondisclosure agreements with fund managers. Three foundations had insufficient publicly available data and did not respond to requests and another five had investment assets that were mostly or completely invested in assets that did not fit with the purpose of the study, such as art or a family office.