Racial equity is a complex and multifaceted issue with deep links to capital markets and the broader financial system. For charitable foundations who have made commitments to this issue, their main investment portfolio can be a powerful tool to drive positive outcomes.
Yet the main investment portfolio often remains an underutilised lever for impact. This echoes the long-standing paradox that foundations often give grants to achieve specific social or environmental objectives – yet their endowments are often not invested with those same objectives in mind.
There is vast body of work in the UK and globally, including investor toolkits, data frameworks and capital allocation models that support asset owners in advancing this agenda but adoption by asset owners has in the UK is still nascent. As mission-driven organisations, charitable foundations in the UK have the opportunity to be pioneers in this space and ensure that how their capital is allocated, managed and stewarded delivers positive racial equity outcomes.
The Impact Investing Institute, with support from Esmée Fairbairn Foundation, Joseph Rowntree Foundation, and City Bridge Foundation, is launching a programme that seeks to engage charitable endowments in exploring what actions they can take within the current financial systems to invest in racial equity outcomes through their main endowment investment.
Our approach
We will act as a convener and a bridge, bringing together capital allocators like charitable foundations, and those working to advance racial equity in financial institutions and beyond, to amplify existing expertise and help translate that into practical pathways that investment committees and senior leaders can act on.
The intention is not to replicate work already underway, but to connect and strengthen it so that foundations can progress with confidence and collective momentum on embedding racial equity considerations into their investment activity.
We are doing this in two keyways:
- Convening a cohort of charitable foundations to explore how racial equity considerations can be reflected in their mainstream investment strategies.
- Sharing emerging case studies and amplifying existing tools and resources to inspire action that can signal an appetite for change within the broader market
Project lead
Senior Programme Manager, Private Wealth programme
