Investments

About

As an endowed foundation we are trying to address the historic paradigm that still dominates philanthropy today: make as much money as possible by investing in any profitable business no matter its social and environmental costs and then give away five percent in grants to “do good” in the world. That approach, as many agree, is not enough. Foundations need to be as committed and mission focused in investing their endowments based on ethical and principled social values as they are in making grants. Values-driven investing is relatively unexplored territory for philanthropy and its lack is a huge ethics and accountability oversight in our field of practice.

We view money as a tool and aspire to be responsive in our grantmaking and creative in our investments. Swift Foundation’s approach to investing is to apply a continuum approach across the spectrum of grants to investments. This means we communicate openly and regularly among investment and program staff, and pay attention to the intersection of grants and investments. We understand that visionary companies committed to high ethical priorities and working in underserved communities often require additional grant support. Furthermore, the nonprofit organizations we work with sometimes need access to low-interest rate loans to maximize their results.

While we are committed to the foundation’s future, we are not trying to grow the endowment exponentially if it would mean compromising our values in order to make more money. We have decided to maintain about 85% ($50 million) of the foundation’s $60 million endowment in perpetuity and have assigned $10 million to the Transitional Portfolio.

To that end, we have retained Manchester Capital to invest the Core Portfolio towards maintaining the endowment’s current size. Growth beyond the $50 million in the Core Portfolio can be re-allocated to the Transitional Portfolio once the grants and administrative costs are covered. Likewise, when investments in the Transitional Portfolio have long enough track records and consistent returns in their asset class they are then moved into the Core Portfolio.

Investment Criteria

In alignment with our mission, Swift Foundation’s investment criteria focus on supporting socially and environmentally responsible endeavors. We aspire to model this philosophy of asset management. For example, it is not just about agricultural productivity, but also soil health, social justice and land rights. Nor is it simply about making more low interest rate loans, but also about focusing on minority ownership, worker ownership, community ownership, profit sharing and other models of community benefit. Alongside our highly mission-aligned investing, we also give priority to best practices across the portfolio. We strive to be strategic in aligning our investing with our grantmaking by discussing with a recipient (be they, grantee-partner, business or organization) whether a grant, loan or investment is the most appropriate instrument to meet their needs.

How We Invest

As a foundation with a small staff, we believe that we can employ many strategies to address significant financial inequities in our current system and support visionary investment work with investment support from Manchester Capital. This includes our engagement with and practice in:

  • Making deposits in social and environmentally oriented Community Development Finance Institutions (CDFIs);
  • Relying on mutual fund managers to screen for social, environmental and governance factors in our public equities;
  • Working with fund manager specialists to vote our proxies, and;
  • Engaging in shareholder activism around key environmental, social and governance issues.

We think smart investing means being conscious of social, environmental and governance factors. Thus, the Impact Investment Committee reviews each mission-aligned proposal before making an investment and reviews the overall portfolio at biannual board meetings.

Proxy Voting Guidelines

We believe it is our obligation as shareholders to file resolutions and vote for or against proxies in accordance with our mission. While our priority is investing in change, we also believe shareholder campaigns are another useful way to further our mission.

No Buy Guidelines

Swift Foundation does not invest in any company receiving 10 percent or more in gross revenues from the development, manufacture, sale or distribution of any of the following items:

  • Coal or nuclear power (including the mining, storing or transportation of such fuels)
  • Genetically modified organisms (seeds, fish or animals)
  • Synthetic agrochemicals
  • Old-growth timber
  • Antipersonnel weapons, armaments, ammunition or weapons-related systems
  • Nuclear weapons contract awards from the U.S. Department of Defense or comparable agency or department of any foreign government

Companies that do not fall into any of the above categories may still be ineligible for investments or eligible for immediate liquidation if their business practices prove to be a gross violation of the social principles (such as human rights violations; the violation of free, prior and informed consent of Indigenous Peoples; discriminatory or abusive labor practices, including the exploitation of child labor; flagrant or egregious damage to the environment; and unethical business practices).

Emerging markets commingled equity pools are exempt from the above restrictions if specifically authorized and if the aggregate exposure of companies otherwise prohibited does not exceed 10 percent of the value of the fund.