The session hosted by the Intentional Endowments Network (IEN) at Confluence Philanthropy’s 2020 Belonging Town Hall on September 28th welcomed a diverse representation of stakeholders from the investor, advisor, and asset management communities to explore how endowments can approach the conversation on racial equity with their advisors, delving into one of the Action Steps outlined in IEN’s new resource - Investing in Racial Equity: A Primer for College & University Endowments.
One of the ways in which investors can leverage their assets and power to advance racial equity is to ask their advisors about their approach to diversity and inclusion internally and in the investment process. Asking questions and evaluating the quality of the answers is a great first step in advancing the learning for both stakeholders. Some key questions that endowments can ask their advisors include:
- What percentage of your team, executive leadership and Board are BIPOC?
- Does your firm have a statement or policy regarding diversity, equity and inclusion?
- What percentage of your current assets under management are managed by firms where greater than 50% of the ownership is with Black, Indigenous and other people of color?
- How many diverse owned firms have you met with during the year and how many of them have you hired or recommended to your clients?
For an endowment like the Warren Wilson College, racial equity has been an essential consideration in their investment process. Anthony Rust, the Chair of the Investment Committee, shared how the college came to be where they are now and how they are continuing their learning journey (webinar recording of their story here).
Similarly, given that advisors are seen as gatekeepers by endowments to racial equity investing, advisors were asked to reflect on what they can do to better provide a pathway to racial equity investing for endowments. OCIOs like the Global Endowment Management have been on a learning journey to change many of the processes that have impeded progress in the past and consultants like Colonial Consulting proactively seek out diverse owned managers and include them in manager searches for all clients.
Regardless of whether you are an endowment representative or an advisor, we can’t talk about racial equity without addressing power. Each of us will need to be cognizant about diverse representation in leadership positions, certainly at the firms that we invest in but also at our own institutions. The push to deploy capital with diverse owned asset management firms is critical, and at the same time, endowments and advisors need to look within their own institutions to recognize the power dynamics at play and push for more people of color to sit in decision making positions.
Beyond leadership diversity, portfolio activation through investment solutions that seek to address racial and ethnic economic disparities and shareholder advocacy are areas that have been underutilized as strategies to invest in racial equity and further action is necessary to push this forward.
Investor groups like IEN and Confluence Philanthropy will build on the momentum from this event to spur further conversations and continue to support learning and action for this community.
