My first serious introduction to the concepts and practice of “active ownership” and proxy voting came in the early 2000s as the director of a newly created family foundation, the Singing Field Foundation. At that time, I joined the Environmental Grantmakers Association and began attending its conferences and those of other environmental funder affinity groups. Earlier, as a college student, I was on the periphery of the campaigns around university endowments and investments in South Africa. And, I have always felt that mission-driven organizations with invested assets should take great care that those investments not be in conflict with the mission.
Yet, I observed that most foundation staff and executives at philanthropy convenings were not all that interested or involved in their foundations’ “investments.” The late Steve Viederman from the Noyes Foundation managed to work the topic into many of his conversations, but he was an obvious outlier, and not everyone was eager to engage. If the 5 percent in grants drove mission-aligned change, why not the 95 percent?
In my own foundation, I faced resistance from the “trusted financial advisor” whose services initially accompanied the foundation’s inherited assets. I was told that values-based, mission-aligned investing “has been tried before, but it’s never really been effective.” So, we moved the investments to Clean Yield Asset Management, which provides social and environmental investment screening, proxy voting, shareholder engagement and impact investing support.
Since then, the active ownership field has come a long way. Singing Field Foundation signed on as an early supporter of Confluence Philanthropy, which promotes mission-based investing. Similarly, we have been an early and long-term sponsor of the Proxy Preview, helping grow it as a resource for foundations and individual investors. Not only was this the right thing to do from a mission and values perspective, but it was also a way to multiply the impact our relatively small foundation could have.
During that time and with help from Clean Yield, Confluence, As You Sow and others, we have grown our assets while practicing our version of active ownership, realizing annual payouts well above the mandatory 5 percent minimum. Along the way, we moved a portion of the foundation’s endowment to a Donor Advised Fund at Impact Assets, which enabled us to participate in the promising green chemistry venture fund Safer Made.
Each year, we file or co-file shareholder resolutions, vote our proxies, engage with the companies we own and provide general operating support to some great organizations—environmental, animal, health, arts and grassroots grantmaking. We have also been privileged to be a part of the Divest-Invest Philanthropy movement launched by Wallace Global Foundation’s Ellen Dorsey and others.
Yet, despite all this progress—in our own foundation and in the larger field—the practice of active ownership, while better understood today and viewed less skeptically by some, remains something of a fringe endeavor. It has yet to be fully embraced by much of mainstream environmental philanthropy.
Some things I’d like to see change or evolve in the coming years:
Stronger defense of shareholder rights to practice ESG investing and shareholder advocacy. Attacks on the entire field are one indicator of the impact we’re having. Foundations and other asset owners must step up, defend our rights and do even more to avail ourselves of active ownership tools and tactics. We potentially face a real “use or lose” moment today.
Let’s think and act more as organizers and campaigners. If we want to see the next big groundswell of growth in the field, that means asking, pushing and demanding that others join us, even if that may cause some discomfort. With persuasive financial evidence on our side, active ownership aligns our work holistically across every aspect of our organization, creating synergies and multiplying impact.
We need to do much more to increase access to active ownership beyond the 1 percent of the 1 percent represented in philanthropic endowments and family offices. There are promising opportunities in the field of neobanks and retirement plans offering ESG investments, proxy voting and more. We should make sure our own employees and those of our grantees are able to access and participate in sustainable investing and active ownership opportunities.
Bottom line, pioneering leaders like Steve Viederman, Dana Lanza, Andy Behar and Ellen Dorsey and countless movement partners have helped bring us to this point. Momentum is on our side. I challenge everyone reading this to take a fresh look at their investments, their advisors and their own active ownership practices and make sure every aspect is aligned with their mission. Identify ways to do more and do it better. Tell your story. Enlist your friends and colleagues. Mentor and encourage as many newcomers as you can. Grow the circle. Defend our gains. Give more than 5 percent (consider spending down). Activate 100 percent.
Jon Scott
President, Singing Field Foundation