Private foundations in the U.S. are missing a huge opportunity to put their money where their mission is.
With endowments totaling over $600 billion, much it invested in publicly-held companies, most of those foundations focus more attention on the five percent of their assets they pay out in grants than on the investment of all their assets.
And research shows most foundations delegate the voting of their proxies to investment managers, and that those managers typically vote those proxies based on recommendations of the management of the companies in which the foundations hold stock.
But a growing number of foundations are taking a more active approach to their role as shareholders, aiming to align their proxy voting with their philanthropic mission.
Building on their previous publication, “Unlocking the Power of the Proxy,” As You Sow and Rockefeller Philanthropy Advisors now have published “Proxy Season Preview 2008” to inform proxy voting by foundations.
As the two groups say, by failing to take a more active shareholder role, “foundations miss the opportunity to influence corporate policy, and may unknowingly support actions that conflict with their own guiding principles.”
The new publication explains social and governance resolutions being considered by corporations; looks at key issues and trends; provides updates on votes in recent years on specific issues; identifies key investors and organizations filing proxy resolutions; lists companies that have scheduled shareholder votes; and lists resources and reports to help foundations learn about the activities of peer organizations.
Foundations control a lot of stock in publicly-held companies and, through their proxy voting, can help shape the way those companies do business.
By investing more time and attention to their role as shareholders, foundations can make a bigger impact on the critical issues they spend so much time and attention trying to address through their grantmaking.