How foundations are choosing their investments and engaging with companies to shape the future
Philanthropy has an unlikely but critical superpower, as Danielle Walker-Palmour says in her lead article: investment. European foundations have over 500 billion euros in assets, stored not in vaults but in the global companies that shape our world. And while foundation investment directors might look more like Bruce Wayne than Batman, they are increasingly taking action to protect the long-term value of their investments and to facilitate impact in line with their charitable objectives.
To this end, they have two weapons – asset selection and engagement.
The power of asset selection is in choosing which companies a foundation owns and, critically, which companies they give working capital to through the purchase of bonds or private equity investments. Selecting assets whose activities align with your charitable objectives is one option; another is avoiding companies or sectors that you don’t want to own. The good news is that studies show this could lead to improved performance and better resistance to shocks like coronavirus.