Women, Minorities Manage Just 13% of Charitable Assets, Study Finds

That share of the pie gets even smaller—to 3%—when more stringent definitions of ‘diversity’ are applied. 

The nation’s top foundations invest just 13.5%, or $8.6 billion, of their US-based assets with women and minority-owned firms, a study says. 

According to a study released last week by the Knight Foundation, women-owned firms accounted for just 11% of assets invested by foundations. Minority-owned firms accounted for even less, roughly 9%, on average. 

“We hope these findings improve our understanding of who manages the financial assets of America’s top charitable endowments,” Juan Martinez, Knight’s chief financial officer and treasurer, said in a statement. “The goal of this study is to provoke discussion.”  

Roughly half the world’s wealthiest 50 institutions were studied in this report either through the endowment’s participation or through publicly available data. About $64 billion in assets under management (AUM), held by 26 institutions, was reviewed, out of the $290 billion in total assets held by all 50 foundations.

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Falling Short 

Up close, many charitable endowments surveyed fell well short of the average. For example, the Bill and Melinda Gates Foundation invested just over 3% of its analyzed $1.2 billion AUM with women and minorities. 

But in a written comment for the report, the world’s largest charitable endowment said analysts studied just a “sliver” of its $52 billion portfolio, given the fact that it manages the majority of its investments in-house.

“While we are grateful the study calls attention to this very important issue, it does not accurately capture how we manage our portfolio or our commitment to women and minority-owned asset managers,” the foundation said.

Four top charitable endowments—the George Kaiser Family Foundation, the Robert W. Woodruff Foundation, the Wyss Foundation, and the Ewing Marion Kauffman Foundation—had a whopping total of 0% analyzed AUM managed by women and minorities. 

In a rebuttal, Woodruff said the institution favors passive strategies, while Kauffman said it chose not to participate in the study because of its “flawed” methodology. Kaiser and Wyss did not provide the report with comment. 

Broad Definitions 

Authors of the report conceded that they had difficulty measuring diversity. In addition to assessing datasets from Preqin and eVestment research firms, they also took the broadest definition from endowments. 

“Keeping true to the principle of collaboration with the foundations, we accepted the diversity definitions provided by participating foundations,” the report read. 

If the study adopted a stricter 50% ownership rate for female or minority managers, the overall diversity score from the study would fall from 13.5% to 2.9%, the study said. 

Some good news: About half of the 26 surveyed foundations invested more than 10% with diversely owned firms. The Casey Family Programs, which had about half its $2.3 billion in assets analyzed, had about 35% of its funds invested with women. The John S. and James L. Knight Foundation, which commissioned the report, had roughly 46%. 

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