The Rockefeller Foundation Releases New Policy for Ethical Investing

Commits to investing its $6 billion endowment in a way that matches its values

NEW YORK | April 6, 2021 – The Rockefeller Foundation announced a new Ethical Investment Policy that publicly sets out the manner in which the 108-year old institution manages its endowment.  Designed to be an enduring framework that will evolve over time, the policy articulates the importance of maintaining a healthy and high-performing endowment, while simultaneously investing in a manner consistent with the goals and aspirations of the Foundation.

The Foundation got its start in 1913 when Standard Oil founder John D. Rockefeller provided an original endowment of $100 million. Since that time, the Foundation has provided over $22 billion in program initiatives in today’s dollars while still maintaining an endowment value that has kept up with inflation.  Today, the Foundation’s endowment sits at over $6.0 billion.

“When John D. Rockefeller started The Rockefeller Foundation 108 years ago, harnessing science and technology to promote the well-being of humanity throughout the world was a novel, unproven concept, but in so doing he created a trailblazing, enduring institution that is still guided by these principles,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation.  “In this new Ethical Investment Policy, we are continuing that legacy. It lets us strike a balance, to fulfill our desire to make individual opportunity universal while making prudent investments.”

The purpose behind the new Ethical Investment Policy is threefold:

• Reinforce the mission-aligned manner in which the endowment is managed;
• Proactively address internal and external stakeholders’ questions about how the endowment is managed, in particular as it relates to the Foundation’s overall mission; and
• Set out a clear process to resolve any potential concerns regarding a particular industry, business, company, or security.

The Rockefeller Foundation’s endowment holds a wide variety of investments across asset classes, managed almost exclusively by external parties.  The past and future success of the endowment is built on enduring relationships with investment managers demonstrating sustainable competitive advantages, prudent risk management, and disciplined capital deployment. The managers, like the Foundation’s Investment Office team, recognize the value of the businesses they own is significantly affected by the positive or negative impact they have on society.  As part of its manager underwriting due diligence, the Foundation seeks to ensure every external partner takes into account social and ethical considerations for all investments.

With this official policy, the Foundation is committed to prudently generating high returns commensurate with the goal of ensuring intergenerational equity, while integrating into its investment management activities ethical practices that adhere to the Foundation’s core commitment to promote the wellbeing of humanity and unleash human potential.

“Maintaining a healthy and high-performing endowment is our primary goal,” said Chun Lai, Chief Investment Officer of The Rockefeller Foundation and the driving force behind the new ethics guidelines. “It allows the Foundation to make the same kind of positive societal impacts in the future that it has for more than 100 years.  We believe we can and should manage the endowment towards this goal while simultaneously doing so in a manner consistent with the overall values and mission of the Foundation.”

In the years leading up to the new policy, Chun was often asked whether a particular investment was contrary to the Foundation’s missions and values. Answering that question could be complex and tricky, and he realized that a clear policy was needed.

“We went through a lengthy internal process, including experts from outside the Foundation, to develop this policy,” said Chun. “We’ve made this policy public in the interest of transparency, so all can see the how and why we invest our endowment as it relates to ethical concerns.”

Roadmap for responding to investment challenges:

The Foundation is a long-term investor and does not take extraordinary actions based on the news of the day. There may be, however, instances where a particular exposure is concerning enough such that the Foundation will choose to take extraordinary action to mitigate or eliminate the exposure. Social and ethical issues are often controversial and are anticipated to arise from time to time over the course of managing a global endowment portfolio that is invested across thousands of companies and securities. When a questionable investment exposure does arise, the Foundation will apply the principles of fiduciary and ethical stewardship in its consideration of what actions, if any, should be taken.

A Standing Committee composed of representatives across the Foundation will offer advice and guidance regarding potential conflicts. If some investment exposure in a fund emerges as being at odds with the Foundation’s mission, the Ethical Investment Policy offers a roadmap for how the Foundation might address such an issue.

The Rockefeller Foundation’s history of meeting the moment:

The Foundation’s decision to create this new investment policy is in line with a series of historic steps that one of the world’s oldest philanthropic organizations has taken over the last six months:

• Announcing in December 2020 the commitment to divest from fossil fuels, making The Rockefeller Foundation the largest U.S. foundation to embrace the rapidly growing divestment movement.
• Pledging to spend $1 billion over three years to help end the pandemic for everyone, everywhere while catalyzing a more inclusive, sustainable recovery from the crisis. This was the single largest commitment in the Foundation’s 108-year history, which has distributed more than $22 billion since its inception.
• Securing “Aaa/AAA” ratings for its $700 million of Series 2020 Taxable Bonds by Moody’s and S&P. Prior to the October 2020 announcement, its endowment had been the sole source of financial support since 1929. Now, the Foundation is leveraging both its endowment and the proceeds from its first-ever bond offering for charitable purposes to finance much of this work.

Over the past century, this science-driven Foundation focused on building collaborative relationships with businesses, organizations, governments, and more. During its first 40 years, the Foundation started the modern field of public health, played a key role in fighting the 1918 influenza pandemic, helped to get the organizations that would become the World Health Organization and GAVI off the ground, helped to eradicate hookworm in the United States, and seeded the development of the Yellow Fever vaccine. During the next 40 years, it launched the Green Revolution that transformed farming and kept hundreds of millions from starvation. All of this was done while also investing in innovations that built telescopes and cyclotrons and convening the very best in their fields to solve the world’s most pressing problems, including changing the course of philanthropy with “impact investing” in 2007.

About The Rockefeller Foundation

The Rockefeller Foundation advances new frontiers of science, data, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on Twitter @RockefellerFdn.

Media Contact:
Ashley Chang
achang@rockfound.org
(212) 852-8451