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When Investment Meets Impact: A Lesson for Jewish Foundations

Learning from History

In 2007, the Los Angeles Times uncovered a striking paradox in philanthropic investing. While the Gates Foundation poured $218 million into polio and measles immunization research, their endowment simultaneously invested $423 million in oil companies whose pollution undermined the very health outcomes they sought to improve. This revelation sparked an important conversation about aligning endowment investments with philanthropic missions.


Today's Critical Moment

"Israel has huge potential for long-term growth" Bill Ackman
"Israel has huge potential for long-term growth" Bill Ackman

Jewish foundations face a similar inflection point in 2024, but with a unique opportunity. As our communities confront rising antisemitism globally, the importance of a strong, resilient Israel has never been more evident. Simultaneously, Israel's markets present compelling investment opportunities across multiple sectors - from technology and healthcare to cybersecurity.

Recent market developments underscore this opportunity. Bill Ackman's strategic investment in the Tel Aviv Stock Exchange signals the potential value sophisticated investors see in the market. Meanwhile, sectors like cybersecurity and tech continue to demonstrate remarkable resilience, attracting significant global capital despite regional challenges.


The Power of Alignment



The question before Jewish foundations is straightforward: Why maintain artificial barriers between our endowment strategies and our philanthropic missions? By thoughtfully allocating portions of endowments to high-quality Israeli assets, foundations can achieve two crucial objectives without compromising either:

  • Maintain strong financial returns necessary for sustainable philanthropy

  • Strengthen Israel's economic resilience, supporting Jewish communities worldwide


Beyond Traditional Thinking

This isn't about choosing between financial returns and community impact. Modern portfolio management allows foundations to:

  • Ensure endowments support rather than undermine core organizational goals

  • Invest strategically in Israel's thriving sectors

  • Maximize every dollar's impact through dual-purpose deployment


As institutional investors increasingly recognize the importance of mission-aligned investing, Jewish foundations have an opportunity to lead. By thoughtfully increasing strategic allocations to Israeli markets, we demonstrate how institutional capital can serve both financial and communal objectives.

The Gates Foundation story reminds us that every investment decision carries impact beyond financial returns. For Jewish foundations today, aligning endowment strategies with philanthropic missions isn't just good governance - it's an opportunity to deepen our community's resilience while pursuing strong financial outcomes.


Next week, we'll examine specific sectors and investment vehicles that enable foundations to pursue this aligned approach while maintaining rigorous financial standards.

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Welcome to the Arakura Blog

Welcome to our exploration at the intersection of philanthropy, leadership, and artificial intelligence. As a philanthropic advisor with a focus on the transformative potential of AI, this space is dedicated to uncovering insights that drive meaningful impact. Through my studies at Oxford University's Saïd Business School, I've gained a unique perspective on how strategic giving and innovative technology can shape a better future. Join me in this journey, where we'll challenge conventions and discover new pathways to effective philanthropy. Your thoughts and experiences are invaluable to this dialogue—let's engage and learn together.

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