Investment Forum 2022 – The San Francisco Foundation

The San Francisco Foundation joined donors, fundholders and partners for the 2022 Investment Forum on March 14. The annual event was an opportunity to provide stakeholders with an update on SFF’s investment strategies and performance in 2021, and its ongoing work to strengthen how investments support the equity agenda.

The forum began with an introduction and thanks from SFF Managing Director Fred Blackwell, who stressed the importance of acknowledging our progress in achieving our financial and social impact goals despite global events in the backdrop of the discussion of the day.

SFF’s approach to investing
Mark Doherty, SFF’s Chief Investment Officer, provided an overview of how SFF manages, invests and allocates assets entrusted to the Foundation with racial equity and economic inclusion at the center of the investment process, noting ” In previous decades, endowments and foundations really had distinct strategies for achieving financial and social returns. We have tried to be intentional as an institution to allocate more and more capital to investments that do both.

Doherty emphasized that “we are not giving up returns in our effort to straddle these two and generate social returns. Our endowment fund continues to be one of the top deciles over 10 and 15 year periods compared to other endowment fund foundations. Michael Miller, Chief Investment Partner, Crewcial Partners, provided more detailed information on the Foundation’s high-level performance, which he emphasized is based on long-term strategies, establishing of a collaborative model and using the scale of the Foundation to our advantage.

Continue to diversify our Asset Managers
One of the strengths of SFF’s investment strategy is its growing number of diversified fund managers. In 2021, 75% of new managers hired by SFF were majority women and/or people of color, increasing the number of diverse managers at SFF 10-fold in six years.

In all foundations investments, the foundation strives increase the percentage of our assets that women and people of color manage.

Impact Investing

• Mission-aligned investment pool: Three years ago, we launched this pool with $50 million of our endowment with the explicit goal of generating financial and social returns. More than 70 donor funds have joined this effort and the pool has grown to $120 million.
• Bay Area Community Impact Fund (BACIF): BACIF is a $25 million program-linked investment fund tasked with generating maximum social impact through long-term, low-interest loans to nonprofit organizations fighting racial equity and economy in the Bay Area. A case study was shared in the Forum highlighting two loans BACIF had made to ICA and REDF who then invested in Firebrand Artisan Breads to help grow their business. The owner of Firebrand has created an innovative ownership structure that offers profit sharing for employees, a pioneering example of economic inclusion.

See the full presentation of the 2022 Investment Forum.

The second part of the forum shifted to a fireside chat about how managers can achieve financial returns while generating social returns.

David ibnAle, SFF Director and Managing Partner at Advance Ventures Partners, moderated a discussion with Adeyemi “Ade” Ajao of Base10 Partners and DeShay McCluskey co-founder of AltraVue Capital, both investment managers for SFF.

Ms. McCluskey shared her approach with companies to ensure their incentives align with long-term value creation, saying: “We actively engage with very good managers and superior capital allocators to ensure that their incentives align with long-term value creation. “We take the approach of not withholding capital, but injecting capital to be an active participant by making ourselves available, speaking for impact or being available as a resource for seat recommendations from members of the board of directors, job candidates for management teams or [simply] have regular conversations. When you have these conversations, you bring these [ESG] problems at the forefront, and they can’t hide it, so they need to present you with results, a process or an action plan. She described how current social issues have facilitated conversations with businesses in ways previously unimaginable. “It’s fantastic that the current has become much more important in a genuine way, whereas it was more about ticking boxes in the past. Now these two things are not at odds with superior investment returns .

As venture capitalists have begun to embrace their role in solving social problems, Adeyemi “Ade” Ajao explained why brand and reputation matter and how the industry is starting to lean forward. “Brand matters now. There isn’t a single venture capital firm that hasn’t taken a public stance on diversity or impact issues now. The [lack of] effort is challenged by entrepreneurs and people in the Twitter sphere who ask, “What did you actually do? The general measurement and reporting trend is that your brand and reputation are slowly becoming the same,” Ajao said.

Use our resources to support our mission
The forum highlighted the success of SFF’s investment strategies and how collaboration with its donors, fundholders and partners continues to act as a catalyst for change in the community. The foundation encourages other investors to follow its approach of allocating to diverse managers and generating strong financial and social returns while centering racial equity and economic inclusion so communities can thrive.

Presenters at the 2022 Investment Forum included:

• Fred Blackwell, CEO, San Francisco Foundation
• Mark Doherty, Chief Investment Officer, San Francisco Foundation
• David ibnAle, SFF Director and Managing Partner, Advance Ventures Partners
• Michael Miller, Chief Investment Partner, Crewcial Partners
• Adeyemi “Ade” Ajao, General Partner, Base10 Partners
• DeShay McCluskey, Co-Founder and Managing Partner, AltraVue Capital

Learn more about the impact of SFF investments on communities in the Bay Area and beyond.