Going "All In"

Our impact investing commitment

In November 2023, the Board of Directors of The California Endowment committed to align 100% of The Endowment’s assets with its mission, also known as “going all in.” This decision builds on learnings from over a decade of impact investing and was made to answer the urgency felt by the families and communities we serve.

America is founded with enormous promise anchored in the right to “life, liberty, and the pursuit of happiness.” Yet, in 1776, that promise made by all-white founding fathers did not truly include everyone. Today, there are still barriers that stand in the way of this promise becoming a practical reality for all – particularly for people of color and those with little to no wealth. Perhaps chief among these barriers is the brand of capitalism that under-invested communities encounter on a day-in-day-out basis which results in choosing between paying for rent and paying for healthcare, choosing between paying for transportation and food, not having the “right” collateral to qualify for a small business loan. And so on.

The work of The California Endowment has been focused on building a California for all, a “Beloved Community” – that delivers on our nation’s promise through health, wellness, inclusion, and shared prosperity. The impact investing work to date has taught the foundation important lessons about how it can put capital to work to achieve this mission.

When used inclusively, democracy and capitalism are two important pathways that can transform the nation into a Beloved Community. As America approaches its 250th birthday in 2026, The Endowment asked itself: How can this enormous promise articulated at our country’s founding but not realized for all, be reaffirmed, and this time, be fulfilled for everyone? The California Endowment considered what it could do to help shift to a more inclusive brand of capitalism for all and respond to the urgency felt by families and communities.

To that end, The Endowment has made the deliberate decision to be more than a grantmaker and more than a community agitator. The Endowment embraces its identity as an institutional investor and is committing to going “all in” to begin aligning all of its investment assets with its mission and values.

With $4 billion in assets under management, The Endowment believes this makes it the largest foundation to date, to make an “all in” impact investing commitment.

The Transition Is Already Underway

The Endowment is now embarking upon a journey where it will consider mission and values as it makes all investment decisions with the goal of bringing 95% in alignment. Shifting all capital toward mission will not happen overnight and will mean there is a lot of work ahead. As a first step, The California Endowment is developing a new impact framework which will guide in examining every investment decision for social impact alongside financial returns.

The path forward is supported by the work The Endowment has done over the last decade to invest for positive social impact. Since inception, The Endowment has implemented “negative screens” that applies to its investment portfolio (that 95%) in order to prohibit certain investments that don’t align with mission and commitment to racial equity, healing, and wellness. The California Endowment started by not investing in tobacco companies, and expanded that to for-profit prisons, and then to companies that manufacture firearms.

As time passed, it pushed further by asking how the foundation could intentionally invest capital in the things it believes in. Access to capital is unevenly available to many communities in California and across the country, so why shouldn’t the Endowment make resources available to support communities’ power and resilience?

All of this is what led the Board of Directors to carve-out $350 million for making mission- and program-related investments that tested and proved the model. (Read about The California Endowment’s journey with program-related investments in this report: Building Trust & Equity.) The foundation has also committed parts of its endowment to diverse fund managers.

Forging Ahead

In November 2023, The Endowment’s Board resolved to begin the process of transitioning TCE’s investment assets to support and more fully align with The Endowment’s vision of a California and nation that supports wellness, inclusion, and shared prosperity.

By committing to invest the $4 billion entrusted to TCE’s oversight towards mission and values, the foundation is using its mandate and power as an institutional investor to stand with the communities it serves, and to contribute to a more inclusive brand of capitalism. The Board recognizes this process will take time but is eager to expand the quest to maintain the financial strength of The Endowment over the long term while advancing the mission.

In sharing the news of this expanded commitment to impact investing, The California Endowment hopes to stand as a beacon for others who are rethinking how their capital can be used to support mission and values. It also wants to lock arms even more closely with peer institutions that have also commenced on this journey.

In pursuit of this vision, The Endowment is committed to being transparent to the communities it serves and to the field of peer institutional investors. The foundation believes that by holding itself accountable and by sharing “lessons learned” from the journey, it will have greater impact in reanimating and fulfilling the promise of America, to reshape new markets for society and to give agency and belonging to all.