The Kresge Foundation in Troy, Michigan, has announced that, by 2025, 25 percent of its U.S. assets under management will be invested by female- and diverse-owned firms.
Announced at the annual conference of ABFE (formerly the Association of Black Foundation Executives), the pledge is part of the foundation's efforts to align its hiring and investment practices with its institutional values by championing opportunities for U.S. investment firms that have been underrepresented with respect to the management of its endowment, with a focus on those led by women and people of color. To help achieve its goals, the foundation will work intentionally to attract more diverse candidate pools, diversify its roster of endowment managers, and establish a model for peer organizations and the investment industry to follow.
With the announcement, Kresge becomes the first private foundation to sign ABFE's Diversity in Foundation Asset Management Pledge, a challenge designed to encourage philanthropic and institutional endowments to take concrete steps to expand the gender and racial diversity of their asset managers. Developed in advance of ABFE's fiftieth anniversary, the challenge aims, by the end of 2021, to secure pledges from fifty foundations to place up to 25 percent of their assets under management with women- and minority-owned firms.
The foundation also has revamped its recruiting and hiring practices to remove implicit bias and ensure that it is attracting a more diverse and talented candidate pool, and is supporting efforts to build a pipeline of young people who are interested in and prepared for careers in the investment industry.
"This is about equity. It's about accountability. And it's about better economic outcomes," said Robert J. Manilla, vice president and chief investment officer at the foundation. "We believe that diversity of thought, background, and beliefs leads to better investment decisions and returns, so our effort to diversify our investment managers is not only the right thing to do, it's the smart way to work."
"The reluctance to face the finance industry's demographic has stifled its growth and impact," said ABFE president and CEO Susan Taylor Batten. "Today Kresge is taking important steps to not only look inward, but to serve as a model for other institutions that manage large endowments."
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