Ellen Dorsey, executive director of the Wallace Global Fund, mulls the question: Why don’t foundations collaborate more?
“It’s not to say foundations don’t collaborate,” she says. “But we don’t do it naturally or easily.”
Mid-thought, her iPhone begins to buzz, the second such interruption in five minutes.
“Gosh,” she says. “My phone will not stop.”
Ms. Dorsey’s phone has indeed been busy. It’s been her most powerful tool in an ambitious attempt to persuade foundations to divest their endowments of fossil fuels and invest in clean-energy solutions. She is the founding force behind Divest-Invest Philanthropy, a network of foundations that have pledged to divorce themselves from fossil fuel. Membership has grown from 17 to 72 since the effort launched in January.
In her unofficial role as chief evangelist, Ms. Dorsey has worked the phone lines, spoken at conferences, and addressed foundation boards. Her stated goal is to move as much foundation money as possible in an attempt to buoy a larger environmental divestment movement and curb climate change. Whether she achieves that or not, Divest-Invest has already raised interesting questions about the philanthropic world’s political will, its ability to self-organize, and its willingness to talk openly about how foundations use their endowments. Some in the movement believe they’ve already broken new ground.
“I do think there’s something unprecedented about this level of collaboration on any issue, toward any end,” says Ms. Dorsey. “And it’s even more remarkable that we’re collaborating around the investments when historically foundations think about having one tool and one tool only, which is their grant making.”
Peter Martin, executive director of the Sierra Club Foundation and a member of Divest-Invest’s organizing working group, agrees. “I’ve never seen anything like it,” he says.
The upstart movement may be a long shot to save the planet, but it is well positioned to set a new course for how foundations talk to one another.
“This isn’t happening in isolation,” Ms. Dorsey says. “This is philanthropy organizing itself as a sector.”
Divest-Invest made its biggest splash in September when the Rockefeller Brothers Fund announced it would sign the group’s pledge and divest its $860-million endowment of fossil fuels. The news made Rockefeller Brothers the largest foundation yet to join Divest-Invest and was carefully planned to coincide with the People’s Climate March in New York City. This type of coordinated outreach has become a defining characteristic of Divest-Invest and part of what distinguishes it from other types of philanthropic collaboration. The group hired Fenton Communications, a left-leaning public-relations firm known for its work with Greenpeace and MoveOn.org, to help manage its media push.
“That was the brilliance of the strategy,” says Dana Lanza, chief executive of Confluence Philanthropy, a philanthropic network aimed at encouraging mission-related investments. “It hasn’t been done before in this kind of way. Ellen could have created ‘Mission Investors for Climate Change.’ She didn’t. She created a pledge. It was simply a matter of getting [the foundations] to state it publicly.”
Behind the scenes, folks like Ms. Dorsey, Richard Woo of the Russell Family Foundation, and Ellen Friedman of the Compton Foundation spread the word from foundation head to foundation head.
“Right now it’s peer-to-peer organizing,” says Mr. Martin.
Letter Campaign
After announcing its initial cohort of 17 foundations in January, Divest-Invest sent letters to the top 3,000 American foundations inviting them to join. That, along with media attention, helped raise the group’s profile and attract its next round of signatories. The group’s 76 members now represent more than $4.2-billion in assets, according to a report by Arabella Advisors.
Divest-Invest hopes to triple the number of constituent foundations by the time the United Nations holds its climate-change conference in December 2015.
Historically it’s been difficult to persuade foundations to view their endowments as extensions of their mission.
Many foundations prefer to keep a firewall between program officers and financial advisers. The investment committee’s job is to “make as much money as you can,” says Ms. Lanza. “The people who give it away, their role is to give it away and not ask questions about how it’s made.”
Ms. Lanza’s group, Confluence Philanthropy, began in the fall of 2008 to try and break down some of those traditional barriers. The group now represents $34-billion in assets, Ms. Lanza says, up from $16-billion in 2008.
A similar group, Mission Investors Exchange, formed in 2012. Its champions include the Annie E. Casey Foundation, the F.B. Heron Foundation, and the Meyer Memorial Trust. Although the field of mission-related or program-related investing is not new—the Ford Foundation began experimenting with the concept in the late 1960s—it is gaining mainstream traction.
Divest-Invest has no doubt tapped into this momentum. A number of foundation leaders at the movement’s core say they were already divested from fossil fuels or in the process of divesting before the campaign started. In its first year, Divest-Invest has relied on these foundations, as well as those focused on the environment, to build its support base.
Big Goals
Divest-Invest, however, wants to go further. “This issue is unlike any other issue,” says Ms. Dorsey. “It will impact every philanthropic entity in this country and in the world.”
The next year should help determine whether fossil-fuel divestment can unite a broad swath of philanthropy, or whether it’s a fringe strategy of a vocal niche. Divest-Invest is finalizing a 12-month plan that will inform its next round of outreach. Leaders hope they can move their message beyond the coterie of environmentally conscious, progressive foundations they’ve already rallied.
So far no foundation ranked among the top 45 in assets has joined Divest-Invest. And moral suasion alone may not be enough to win over foundations without a clear environmental focus.
Ms. Dorsey says she is prepared, and eager to translate her group’s message into language even the most button-down philanthropist can embrace. She’ll rhapsodize about the economics of climate change, cite sessions held at the Davos World Economic Forum, and dive happily into the muck of investor jargon.
“This is a market-driven strategy,” Ms. Dorsey says. “Move ... the ... money.”
It is an appeal to conservatism wrapped in the fiery tones of a true believer, the same woman who first embraced divestment as an anti-apartheid activist during her college days.
Ms. Dorsey is blunt, forceful, and animated. She does not play coy, except when it comes to the future of Divest-Invest.
Asked what foundations might soon join the Rockefeller Brothers Fund as headline-grabbing signatories, Ms. Dorsey smiles wide.
“Can’t tell you,” she says.