With an endowment that passed $800 million in 2016, the Rhode Island Foundation has one of the largest single pools for investment in the state. And based on its returns for the last two decades – 7.4 percent per year, which includes two significant dips thrown in – the foundation has been doing a decent job at husbanding its resources. In fact, it has done so well that in 2016 it made $45 million in grants, a record.
How did it achieve those returns? By using the standard tools: domestic and international equities, private-equity investments, fixed income, inflation hedges and the like, “diversified across economic sectors, geographic locations and industries,” according to the foundation’s 2016 consolidated financial statements.
But last month the foundation announced the creation of a $10 million investment fund that will make direct financial commitments to local nonprofits, for-profit entities and government agencies, with the expectation, as foundation CEO and President Neil D. Steinberg said, that the investments will support any “company looking to both do good and make money.”
For its part, Mr. Steinberg said, he wants two kinds of returns on this first-of-its-kind local investment, “positive impact on the Rhode Island community,” and “modest rate returns.”
The foundation has been reaching out to the community for years in attempts to draw out more philanthropic giving. It is logical and worth praising that it is taking a new approach to supporting Rhode Island by making direct investments itself.
