Robert K. Ross, MD, President and CEO, The California Endowment: Parkland Students Inspire Foundation to Screen Out Investments in Firearms Manufacturing

One month after the school shooting in Parkland, Florida that killed 17 people, students across the country are continuing to press for stricter gun control legislation with protests and school walk-outs. According to the Gun Violence Archive, more than 2,837 gun related deaths have occurred so far this year, and both the American Medical Association and the American Public Health Association have recommended addressing gun violence as a public health issue.

The week following the shooting, The California Endowment (TCE), California’s largest healthcare foundation, announced it would begin screening out firearms manufacturing from its investment holdings. TCE’s mission is to expand access to affordable, quality health care for underserved individuals and communities and to promote fundamental improvements in the health status of all Californians. TCE’s mission statement also outlines that the foundation doesn’t focus on prescriptions, but rather “we focus on fixing broken systems and outdated policies, ensuring the balance of power is with the people. We don’t focus on the individual, we focus on the larger community as an ecosystem of health. We work with citizens and elected leaders to find lasting solutions to impact the most people we possibly can.”

Recently, Glasspockets spoke with TCE president and chief executive officer Dr. Robert Ross, about the foundation’s decision to ban firearms investments, and how this aligns with both TCE’s stated health mission, and its core values around diversity, equity, and inclusion.

Glasspockets: The California Endowment recently announced that it will be scrubbing its investments of any holdings in firearms manufacturing, and this is actually not a new practice, but the third “negative screen” you are adding, since you already had screening in place for tobacco and for-profit prisons. Data shows that this practice is actually fairly uncommon in foundation philanthropy, so it’s clear it’s a challenge for the field. When did you begin the practice, and what led to you going down this path initially when you first implemented negative screening?

Dr. Ross: Since we are a health foundation, the founding board actually started with the tobacco screen in the late 90’s.  We added for-profit prisons more recently, after hearing from community leaders that they considered hyper-incarceration as an unhealthy practice affecting communities of color. This is consistent with our core values statement, which also helps guide our board. The very first item in our values states: “We believe that diversity, equity and inclusion are essential to our effectiveness and the long-term health of all Californians and commit to the integration of diversity, equity and inclusion in all our policies, practices, processes, relationships, internal working culture and systems.” By filtering out tobacco, for-profit prisons, and now gun manufacturing we are being consistent with these values.

“We really have to ask ourselves the question of whether the management of our investments portfolio reflects the values we hold dear.”

Glasspockets: There have sadly been many shootings prior to Parkland. What was it about this one that motivated your foundation to act?

Dr. Ross: We were motivated by the youth and high school student activism – I think we were “shamed” to act by their leadership. The California Endowment “values the energy, agility and fearlessness of youth leadership and youth organizing in its many forms including local, statewide and online community-building.”

Glasspockets: And are you aware of other foundations being similarly motivated to act, either now or that already had such prohibitions in place?

Dr. Ross: We have followed the leadership efforts of The California Wellness Foundation, Bloomberg Philanthropies and Joyce Foundation, all of which, to the best of my knowledge, already have a screen on firearms in place. I’m not certain how many other funders currently have a firearms manufacturing screen.

Glasspockets: The California Endowment was an early adopter of our Glasspockets approach to a more transparent philanthropy. So clearly transparency, openness, and accountability are priorities. Is your commitment to these values part of what motivated the decision and the public stand you are now taking?

Dr. Ross: Yes, and it was the reason I published the OpEd in the Chronicle of Philanthropy.  Even though these boardroom conversations can get a little “messy,” it strengthens philanthropic practice if we can demonstrate vulnerability and transparency on tough issues. Without actions, our values just become words on a page.

Glasspockets: Glasspockets is currently advising foundations to become more familiar with what holdings they do have, since these are publicly listed on the 990-PF that foundations annually file with the IRS. And that data is now being released as machine-readable, open data—making it more open and accessible than ever before. Is this something TCE is tracking or do you have any internal practices about monitoring what’s in your 990-PF that may be helpful for others?

“Without actions, our values just become words on a page.”

Dr. Ross: We have begun utilizing ESG (Environmental, Social and Governance) practice approaches, as have many others, as a “values and principles” overlay to our investments portfolio. [ESG screening is an array of ethical exclusion metrics designed to govern certain investment decisions. Excluded companies can include those in the tobacco, firearms, and for-profit prison industries. The alerts look for mentions of portfolio companies (those not currently excluded) and rate them as positive, negative or neutral in terms of these screens.]

Glasspockets: The things you are screening out make a lot of sense for a healthcare foundation. Why do you think so few do it? And what advice would you have for them as far as overcoming those challenges?

Dr. Ross: The answer to this is values-values-values.  Most foundations have both a statement of mission and a statement of values, and we really have to ask ourselves the question of whether the management of our investments portfolio reflects the values we hold dear.  You can’t make a blanket values exception for the investments portfolio.  

Glasspockets: In terms of the screening that had already been in place, what has been the impact on endowment growth?

Dr. Ross: I’m not sure, but I do know that a concern some raise when discussing this is the belief that growth may be negatively impacted by the lack of tobacco and private prisons holdings.  But if you’re acting on your values, then I’m not sure the question is material.  Slavery is profitable, but we’d never invest in that….

Glasspockets: And how about the qualitative impact—things that bottom lines don’t measure?

Dr. Ross: It’s good for boardroom cohesion, and messaging to staff and community that we intend to live up to our values, even if it is discomforting.  It’s hard to put a price tag on reputation and accountability.

--Janet Camarena