Sustainable Philanthropy Case Study
Name: The Rockefeller Foundation
Type: Private Charitable Foundation
Size of Endowment: $4.8 bn
Year of Establishment:1913
The Rockefeller Foundation is a private foundation that aims to promote the well-being of humanity around the world. With an endowment of USD $4.8 billion, the Foundation was ranked as the 39th largest U.S. foundation by total giving in 2015. The Foundation has 200+ employees reported on LinkedIn. The investment team, which oversees the endowment investments, employees 14 people. The CIO, Chun Lai, was the Deputy CIO for 9 years, overseeing portfolio management, asset allocation, and investment research before assuming the CIO role in 2019.
The Rockefeller Foundation was established in 1913 by Standard Oil owner John D. Rockefeller. In the initial years of the foundation, it was devoted mostly to areas involving public health and science. Since then, the foundation has funded many initiatives, from supporting scholars to tackling climate change.
In 2000, the foundation decided to concentrate more on poverty, with four divisions focused on culture, working communities, food security, and health equity. Over its history, the foundation has paid out more than $2 billion and has assisted nearly 13,000 fellows.
The core mission of the foundation has not changed: to promote the well-being of humanity around the world. Five specific issues the foundation focuses on are:
⦁ Basic survival safeguards
⦁ Global health
⦁ Environment and climate change
⦁ Social and economic security
The Foundation’s year-end net asset value grew from $3.5 bn in 2000 to $3.9 bn in 2016. The size of endowment is $4.8bn today. Its annual return before expenses from 2000 to 2016 is 5.26%. During the 16 years, the Foundation’s investment portfolio generated $3.8 billion investment income while the Foundation spent $2.9 bn for both administrative and grant making purposes.
Calculation from Rockefeller Form 990-PF and Annual Reports
Since 2000, the foundation has become increasingly reliant on external managers and alternative assets. The foundation seems to follow a strategy similar to that of Yale’s (Donna Dean, former CIO, is from Yale) Since 2010, the foundation has stopped giving out asset allocation data. However, a clear trend appears even when comparing the allocations between 2000 and 2010. The foundation has moved away from fixed income and developed equities to alternative assets such as hedge funds, private equity, and real assets. The foundation has also increased focus on emerging markets.
The 2002 annual report highlights Rockefeller’s criteria for external manager selection:
“In selecting outside managers, the Foundation seeks firms that have the people, management structure and disciplined processes to generate superior future results, in addition to strong track records. While quantitative tools are essential for organizing data and for portfolio analysis, we believe that fundamental research and judgment will always be necessary in a world of rapidly changing capital markets. Investment expenses have a substantial impact on long-term results, and we consider cost control an important component of effective portfolio oversight.”
The Rockefeller Foundation Managers (from 2014/2015 Form 990 PF)