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Sustainable Philanthropy Case Study
Name: Annie E. Casey Foundation
Type: Private Foundation
Size: $2.7 bn
Year of Establishment: 1948
Description:
The Annie E. Casey Foundation is a private organization devoted to assisting disadvantaged children. This nonprofit is one of the United States' leading foundations, with assets exceeding $2 billion. The foundation works on public policy, social services, and building supportive communities to promote the health and well-being of at-risk children and their families. One facet of its work is grant-giving, totaling nearly $200 million annually.[1]
History:
The Casey Foundation was primarily established by United Parcel Service founder Jim Casey, who wanted to help children and families in need. In 1948, siblings Jim, Harry, George and Marguerite honored their mother by establishing the foundation.[2] For about 20 years, from 1948 to 1965, the Casey Foundation was not a very busy operation – they provided a few grants here and there, but did not have a high-profile program or strategy. That changed in the mid-1960s, when the foundation’s assets had grown considerably and Jim had the time to focus on how to put them to work.[3] In 1965, armed with experts and consultants, the Casey Foundation launched a long-term foster care program in Seattle, Washington.
Since then. the foundation gradually shifted to a broader role in advancing child welfare through social experimentation, research and publicity — particularly gaining notoriety as a "watchdog" over child welfare conditions across the nation. Along the way, it divested its foster care operations – today existing as Casey Family Programs – while increasing its focus on family-preservation research, advocacy and action.
Family Involvement:
Family members were heavily involved with the foundation in the beginning, taking a hands-on approach and setting forth the guideline for long-term strategy of the foundation. When initially determining the direction of the foundation, Jim Casey personally talked to child welfare professionals and even went to Washington to get advice from the Child Welfare League.
Jim Casey remained engaged in the foundation until he died in 1983, actively participating in board meetings and shaping the direction of the foundation. Sharing her brother’s passion and vision for improving the foster care system, Marguerite also served as a board member from 1966 to 1971.[4] The other two siblings who helped set up the foundation were only marginally involved.
As for friends and acquaintances, Jim convinced his UPS colleagues to serve on the board of the foundation. Today, the fourteen-member board of trustees includes nine current or former senior executives of UPS, including the current chairman and CEO D. Scott, and his predecessor, Michael Eskew. John Engler, the former three-term GOP governor of Michigan and current president of the Business Roundtable, is also a member of the Foundation Board of Trustees.[5] No family relatives are currently involved with the foundation.
Mission:
The Annie E. Casey Foundation’s mission is to assist millions of children at risk of poor educational, economic, social and health outcomes. To achieve this goal, the foundation advances research and solutions to overcome the barriers to success, help communities demonstrate what works, and influence decision makers to invest in strategies based on solid evidence.[6]
Investment Program:
Investment Philosophy
Similar to other foundations, the Casey Foundation relies on external managers to manage its assets. The role of the investment office is then to evaluate, select, and monitor the investment managers. It strives to work with top quartile managers, especially in the field of alternative assets. The foundation allocates its endowment to a diverse set of assets.
The CIO is May Ng, who joined the Casey Foundation in 2013 as director of Public Market Investments. She has been responsible for all aspects of portfolio construction and management, including developing strategy and identifying emerging investment opportunities. [7] Before joining Casey, she was a senior investment officer at George Washington University and has held positions at the United Way of America, Freddie Mac and the Monitor Company.
Performance
The foundation has performed relatively well, with an annualized return of 6.56%. In 2008, the foundation managed to generate profits. One noteworthy fact is that around 20% of the fund has historically been invested in UPS common stocks. The UPS stocks have done meaningfully well over the past few years, and have paid out dividends at around 3% yield.
Asset Allocation
The foundation is more opaque than other foundations, and does not show audited financial statements before 2012. The allocation data is thus compared only between 2012 to 2018. The main trend between this time-period was a decrease in allocation from equities and fixed income, and increased allocation to PE/VC funds.
Manager Selection
The investment team first conducts financial modeling of the portfolio to gain a better understanding of the investment managers. It also conducts extensive due diligence, both over web and in person. The foundation uses its extensive network to be introduced to top quartile managers, especially in the field of alternative assets.
The foundation also monitors for possible conflicts of interest and places emphasis on the integrity of the managers. It usually looks to macro trends and investment opportunities, then reaches out to managers within that space. [8]
[1] http://sk.sagepub.com/reference/the-social-history-of-the-american-family/n33.xml [2] http://www.f2f.ca.gov/res/pdf/WhoWasJimCasey.pdf [3] http://www.aecf.org/m/speeches/speech-simplyputselectedspeechesofdouglasnelson-2010.pdf [4] http://caseygrants.org/about-us/history/ [5] https://capitalresearch.org/article/annie-e-casey-foundation-helping-children-becomes-advocacy-for-the-welfare-state/ [6] http://www.aecf.org/about/ [7] http://www.aecf.org/blog/may-ng-and-john-kim-named-vice-presidents/ [8] https://www.slideshare.net/Ramen24/senior-investment-analyst
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