Deaconess Foundation: Investing for Good, Investing for Future Generations
On, Dec. 1, 2022, Matt Oldani, vice president of operations for CHHSM member Deaconess Foundation in St. Louis released this letter outlining its commitment to socially responsible investing that prioritizes diversity, equity and inclusion:
Earlier this fall Deaconess joined our investment partners at Bank of America Private Bank to discuss our socially responsible investment strategy that prioritizes diversity, equity and inclusion in the management of the Foundation’s endowment. Though our strategy has evolved over the years, our goals for our investment portfolio have always been clear: provide operational dollars for the Foundation while ensuring the Deaconess mission continues indefinitely. Since 1998, when Deaconess first began grantmaking, Deaconess has distributed more than $85 million in grants to community organizations for the improved health of the metropolitan St. Louis community, which includes Southern Illinois, and its people.
As Vice President of Operations at Deaconess Foundation, I work closely with our partners at Bank of America Private Bank who are charged with managing our $50 million investment portfolio. As our appreciation of socially responsible investing and racial equity evolved over the years our commitment to integrating these values into desired outcomes and processes required us to refine our goals with our investment office. Our desired outcomes extend beyond the performance of our investments. With intentionality, our hope is to change and influence conditions beyond the reach of our financial assets.
To this end, our strategy includes the following three different tactics:
- We believe, first, in doing no harm. We request that our investment office screen out companies that are engaged in the manufacture, sale, or distribution of weapons, tobacco, pornography, gaming, and alcoholic beverages. We have also divested from companies that profit from the prison industrial complex including privately owned correctional facilities.
- We request our investment office to identify companies with values that align with Deaconess’ regarding the treatment of employees and a commitment to the responsible use and protection of the environment. Thus, we favor investment in corporations that showcase progressive and industry-leading policies relating to people management and environmental stewardship and have a proven historical performance record in relation to such policies.
- We believe that the best outcomes come from diverse teams. Therefore, we request our investment office to direct a minimum of 5% of the Foundation’s assets to historically underfunded or undercapitalized firms led by African American, Native American, or Latinx managers. Historically these firms have faced challenges raising capital which may lead to less competitive businesses, higher costs of capital and higher risks of bankruptcy. Prioritizing investments with these firms add investment capital and provide for operational longevity.
We are proud to say that nearly 90 percent of our portfolio is invested in a socially responsible manner and more than 23 percent of our portfolio is invested with fund managers who identify as members of the world’s global majority. We will continue our efforts to increase those percentages.
In implementing these strategies, Deaconess has continued to see positive financial returns, invest deeply in our community, and maintain $50 million investment portfolio. To us, process, which is how we go about doing the work, is just as important as outcomes. Watch the recording to learn more.
We invite the philanthropic sector, businesses, individuals and more to join us socially responsible investing that prioritizes diversity, equity, and inclusion.
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