Silicon Valley Community Foundation is one of only four major foundations in the country with more than 30% of its assets managed by firms owned by women or people of color, according to a recent study by the Knight Foundation and Global Economic Group.
We’re proud of these findings, which are the result of a deliberate effort to seek diversity in the people and firms who manage SVCF’s investments. Before launching this effort in 2014, SVCF employed three minority- and/or women-owned asset management firms with whom we had invested $52 million. As of June 30, 2021, SVCF has deployed $319 million to diverse-owned firms. This represents over 30 percent of total non-cash assets advised by our investment consultant.
However, the overall findings of the Knight study, which looked at the representation of investment firms used by the top 55 charitable foundations in the country, indicate there is much work to be done to achieve equity within the philanthropy sector.
The study found that just 16.6% of assets invested by 30 major foundations are managed by diverse-owned firms, and only 9.3% are managed by women-owned firms. This means that of the nearly $67 billion analyzed in the study, only $11 billion was invested with firms controlled by women or people of color. To truly move our society forward in an equitable way, this number must be higher.
Here’s why: Working with diverse asset managers is important both for achieving a varied and balanced portfolio and for promoting economic equity. Including more diverse decision makers in the world of philanthropy helps to distribute power that has long been held by a few, and opens the door for women and people of color to participate in a billion dollar industry.
Research by the Small Business Administration finds that asset managers of color are more likely to invest in entrepreneurs of color. In philanthropy, this means that hiring asset managers from underrepresented backgrounds can help increase support for underrepresented causes and communities.
SVCF is committed to making philanthropy more effective and inclusive across all the work we do to better address some of our region’s toughest issues. Working with asset managers and firms of different backgrounds is one of the many ways we can achieve this goal.
We are also committed to doing all we can to combat systemic disparities. Over the past year, SVCF has undergone a shift in its discretionary grantmaking strategies to this end. However, we know that our influence as a community foundation is not limited to our grantmaking, and systemic disparities exist in all areas of philanthropy.
SVCF is encouraged by the increased participation in this year’s report by the Knight Foundation; five new foundations engaged in the study. We hope the discussion around diversity will encourage more foundations to seek and engage with more diverse asset managers.