Forging Ahead: Diversity, Equity and Inclusion in Foundation Investing Activities

Forging Ahead: Diversity, Equity and Inclusion in Foundation Investing Activities

A growing number of foundations in the Pacific Northwest are working to integrate diversity, equity, and inclusion (DEI) practices into their investment strategies, a report from Philanthropy Northwest finds. Based on interviews with executives at eight large foundations that have embraced organization-wide DEI efforts, the report, Forging Ahead: Diversity, Equity and Inclusion in Foundation Investing Activities (19 pages, PDF), found that the process often involved looking for ways to apply a DEI lens to discrete functions within the foundation and ensuring that all the foundation's assets were in alignment with its DEI goals. Setting aside a portion of its investment portfolio for DEI-related impact investments was a path that several foundations took, while some also applied a DEI lens to their broader portfolio. The report notes several challenges in vetting DEI-aligned investments, including the difficulty of tracking metrics, the amount of staff time needed to source and underwrite new investments, and the limited number of DEI opportunities in the white male-dominated private equity and venture capital sector, and offers recommendations with respect to hiring practices and salary structures for in-house investment staff working to advance DEI outcomes.

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