Objectives of the foundation
The mission of Rockefeller is to focus on ecosystem change that facilitates the welfare of humanity globally (The Rockefeller Foundation, 2017b)
Location Headquartered in New York, USA and offices in Bangkok, Thailand and Nairobi, Kenya. Endowment
Capital - Assets as per the audited AFS
$4,086,668,000 (PKF O’Connor Davies, 2017)
Philanthropic Capital – PRI and grant giving
Grants approved as per last audited financial statements: $173,694,000
Value of PRI assets as per last audited financial statements: $23,084,000 Strategies
deployed
Focus on using their PRI allocation from their philanthropic capital to develop products and solutions that further the development of the impact investing eco-system.
Blended finance model followed:
• Blended structures that include using the fact that their philanthropic capital can take losses (- 100%) and invest in solutions that will create a product pipeline using mainly debt and equity.
• Take mezzanine positions to provide comfort to traditional investors who take senior positions on an investment deal.
Results of their strategies
Rockefeller may not invest its own fiduciary capital in impact investing strategies, but has been critical to leveraging the development of a sector by investing in the development of an
ecosystem. They identify key blockages (for example, the lack of an investable pipeline for impact investors and the need to connect impact investors with investees) and develop those in the interest of the sector as a whole. They take high risk debt and equity investments, to prove very early stage models to traditional investors that once proven should feel relatively more comfortable investing in that product such that scale can be achieved.
“We purposefully back a wide range of impact investing products because we recognise that the market lacks viable product models. Many of them will fail, we know. But we are interested in learning from those failures and the ones that really, really work.” Adam Connaker – Programme Associate: Innovative Finance – Rockefeller Foundation
Bill & Melinda Gates Foundation Objectives of
the foundation
The Foundation focuses on health, new technologies for health delivery, advocacy for policy change and education. In emerging markets, the focus is on innovative and high-risk projects to improve health outcomes so that people can address hunger and extreme poverty themselves. In the US, the focus is on providing access to opportunities to succeed for those with the least resources (Bill & Melinda Gates Foundation, 2018)
Location Headquartered in Seattle, Washington, the Gates Foundation works globally to build impact in emerging
markets and has regional offices in regional offices in the US, UK, India, China, East and Sub-Saharan Africa. Endowment Capital - Assets as per the audited AFS
Rather than an endowment that is reflected on their balance sheet, the endowment that funds the Foundation is independently managed by the Bill & Melinda Gates Foundation Trust, that is used to manage the assets allocated to the Foundation. This interest the Foundation has in the Trust is
$51,852,234,000 (KPMG LLP, 2018). According to the Foundation, staff have no influence on the Trust’s investment decisions, and no visibility into the Trust’s investment strategies or holdings, other than what is publicly available for example, via published tax returns.
Philanthropic Capital – PRI and grant giving
Grants approved as per last audited financial statements:
$5,867,735,000 This includes programme expenses. According to the Foundation Fact Sheet, the total Direct Grantee Support for 2017 is $4.7 billion (Bill & Melinda Gates Foundation, 2018). Value of PRI assets as per last audited financial statements: $392,134,000
Strategies deployed
The Gates Foundation use their PRI allocation from their philanthropic capital to take equity in or provide loans to pharmaceutical companies that are developing innovative health delivery solutions and platforms that solve for disease challenges in low-income countries. They also use their balance sheet to provide volume guarantees so that emerging market governments and consumers can acquire access to medication, vaccinations and other basic health medication (family planning) at scale and reasonable pricing. Blended finance model followed:
• Blended structures that include guarantees that guarantee volume at price points such that the pharmaceutical company would enter an emerging market that they would otherwise not enter. • Using their philanthropic capital, high-risk investments into long term technological development that
would develop vaccines (for example Ebola vaccine) and preventative medicines (for example reproductive and Tuberculosis) for use in emerging markets. They use debt (at interest rates ranging from zero to market rates) and equity (patient capital).
Results of their strategies
Volume guarantees have been successful in opening markets and stimulating private pharmaceutical companies that previously would not entertain entering such markets and ultimately become mainstream in emerging markets (Brest, 2016).
“… we become a reference point for the [investee] company to signal to the market and other investors for them that Gates is investing, supporting their technology. I am sure that you will appreciate that while a grant is a better deal for the company because its non-dilutive financing often times companies prefer to get an equity investment because it is better to ‘get married by equity’.” Alex Siegel – Programme Related Investments – Bill & Melinda Gates Foundation
The Gatsby Foundation Objectives of the
foundation
Specifically, the Gatsby Africa programme focusses on the development and scaling of sustainable industries that incorporate emerging farmers and entrepreneurs in East Africa (The Gatsby Foundation, 2017).
Location London, United Kingdom Endowment
Capital - Assets as per the audited AFS
£346,773,000
Philanthropic Capital – PRI and grant giving
Grants approved as per last audited financial statements: £41,496,000
Strategies deployed
The Gatsby Foundation focuses on funding innovation in a variety of sectors, but specifically in Africa have invested in a number of initiatives to foster the development of resilient business models.
Blended finance model followed:
• Blended structures that take risk reward positions (mezzanine to the traditional investor’s senior position) and thereby reducing the risk for the traditional investor.
• Developing the sector by offering patient capital such that the emerging farmers and the agricultural value chain can mature to a point of attracting traditional capital.
Results of their strategies
An initial foray into The Africa African Agricultural Capital Fund to leverage funding from a traditional mainstream investor (JP Morgan) using a risk-reward structure resulted in key learnings. These learnings resulted in a shift in strategic focus. Using their grant capital to provide long terms loans and equity (patient capital) into the development of economically viable agricultural sectors (tea, forestry and aqua-farming) with the emerging farmers as shareholders. This sector development has been more impactful in that they had greater potential to scale when ready to attract traditional investors.
“… unblock constraints in a completely coordinated way. And if you do all of that we believe that we will be the catalyst that will create a pioneering industry that will have the inputs in place, have demonstration farms … commercial investors looked at this and said ‘Hey we can do this’ and trundled off and replicated. And aqua culture proliferated. Once you got the industry over the hill, the industry takes off.”