The Cleveland Foundation upholds a longstanding commitment to racial equity engrained in our grantmaking and community engagement initiatives and heightened by the recent national reckoning on systemic racism. As an urgent and timely extension of this work, including the 2020 launch of the Cleveland Black Futures Fund, our board and staff are taking a close look at internal structures that can be used as instruments to further promote racial equity. We’re proud to report on three fall 2020 developments described below, including the launch of a Racial Equity Investment Pool, establishment of a Police Brutality Bond exclusion and adoption of an official Anti-Hate Group policy regarding grants from donor-advised funds.
Launching a Racial Equity Investment Pool
Our investment committee, responsible for governing the Cleveland Foundation’s $2.7 billion portfolio, observed that there is still underrepresentation of Black, Indigenous and People of Color (BIPOC) on public equity boards. In response to this disparity, the foundation launched a Racial Equity Investment Pool, likely the first of its kind among the largest U.S. community foundations. The pool is already valued at $15.8 million.
The pool is focused on investing in U.S. public companies that (1) are inclusive of BIPOC representation on their boards (targeting 50% more representation than the Russell 3000 Index), (2) have a history of fostering an inclusive, equitable and diverse workplace culture, and (3) have a stated commitment to racial equity. Outside the U.S., the pool invests with BIPOC owned (>50%) investment firms to help equalize the diversity imbalance in investment management. The pool is complementary to the foundation’s Socially Responsible Investment Pool and offers some of the same socially-conscience elements while also giving donors a more focused, mission-driven investment option for racial equity.
The Cleveland Foundation also seeks to partner with BIPOC and female investment managers across our full portfolio of assets. Furthermore, we seek to collaborate with other entities that share our values of diversity, equity and inclusion.
Establishing a Police Brutality Bond exclusion
Police Brutality Bonds are municipal bonds that have a clause that allows them to be used to settle police misconduct claims, putting the repayment and interest burden on the taxpayer instead of the officers committing the crimes. As part of our Social Impact Investing program, the Cleveland Foundation took the position of not owning these types of bonds anywhere in our portfolio. After a scan of our holdings, we found and immediately sold a very small position in such assets. Although this divestiture is a small statement in dollars, we hope that it will lead to a conversation inspiring other investment managers to screen their own portfolios and encourage municipalities to put more of this burden on the liable officers and not the public.
Adopting an Anti-Hate Group policy regarding grants from donor-advised funds
Our board of directors unanimously approved an official Anti-Hate Group policy that formalizes a process for our staff to flag, research and deny a grant recommendation from a donor-advised fund to a public charity widely considered to be a hate group. While it is important to note that the Cleveland Foundation has not had a known incident in this regard, we believe having an official Anti-Hate Group policy aligns with our mission that is rooted in enhancing the lives of all we serve and helps provide additional safety and stewardship for all involved. Simply put, we believe this policy and the updates noted above reflect the shared values and philanthropic spirit of generations of our donors.
Cleveland Foundation Racial Equity Historic Milestones
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