The Chicago-based Joyce Foundation is a private, nonpartisan philanthropic organization that invests in public policies and strategies to advance racial equity and economic mobility in the Great Lakes region. Its mission is to support research, development and advocacy across culture; democracy; education and economic mobility; the environment; gun violence prevention and justice reform; and journalism.

“We take the mission seriously,” CIO and Treasurer Nickol Hackett says. “Strategically and opportunistically, we want to support the mission with patient capital. We want the opportunities to support value drivers, not just alpha.”

With $1.4 billion in assets, Hackett continues to seek better alignment between the portfolio and the foundation’s goals, which historically had been to meet the relatively static 5% spending objective, with a portfolio structure designed accordingly. More recently, she says, “there has been an intentional examination of the purpose of the endowment in relation to the shifting needs of the foundation as a responsive partner to the nonprofit sector and how the endowment might be structured to be responsive in kind.”

“Grantees have less resiliency in times of uncertainty,” Hackett says. “We want to have the flexibility to support them, which therefore may mean advancing or increasing [foundation funding] to them.”

The foundation has reported one-, five- and 10-year annualized returns, net of fees, of 9.8%, 9.0% and 8.6%, respectively.

Among other key challenges, the foundation is working to meet its objective to operate in perpetuity “with a sustained increase in spending, a potential shift in tax policy and a more challenged liquidity environment for private market strategies,” Hackett says. … “Growth objectives, flexibility and liquidity have been the three primary elements driving our strategic focus.”

Hackett and the investment team completed a comprehensive, multi-year portfolio review, resetting return-and-risk objectives and considering “how to position our assets to be of best utility to the foundation to meet flexible spending requirements and mission objectives.”

The review involved work on the portfolio structure, manager lineup and risk exposures within allocation of segments of the portfolio both to optimize for growth and to create a liquidity sleeve which provides at least 1.5 times Joyce’s annual spending in support of its grantees.

Hackett tells CIO that the last segment of the restructuring was completed in mid-2024, with a repositioning of approximately one-third of the portfolio to less-geographically-constrained global mandates. It also decarbonized large segments of the portfolio and identified public and private investment strategies with emphasis on sustainability as climate-neutral or climate-friendly solutions as part of Joyce’s long-term clean air and water commitment, including support for lower emissions and energy transition.

“Core to this effort is ensuring the portfolio is diversified by strategy and ownership,” Hackett says. “We have seeded several early-stage fund managers who have delivered on the alpha thesis of early-stage managers … for our portfolio.”

Over the five years since the restructuring began, the foundation’s return ranked in the top quartile for all endowments and foundations through March 31, according to data reported by Cambridge Associates.

The investment program, in support of the foundation’s mission, has also sponsored five first-generation college student interns (one annually over the last five years) in their freshman and sophomore college years, introducing them to investment management careers. Interns who have graduated have successfully found jobs at hedge funds and in other sectors, including consulting.

“Each intern has been a valuable contributor, and hosting them has been one of the most rewarding aspects of our program,” Hackett says.

—Amy Resnick