John Ellerman Foundation is an independent endowed grantmaker with an aim to advance the wellbeing of people, society and the natural world. We recognise that our aim should apply across all that we do by taking a ‘total impact’ approach to our grantmaking, operations and investing. Our ambition is to achieve a positive impact through our endowment and ensure that our investment activity aligns with our charitable aim.
The Foundation’s financial objective is to generate a total investment return sufficient to enable the charity to maintain, and if possible enhance, the real value of the portfolio and carry out its operations in perpetuity.
You can read our full Investment Policy by clicking here, and a summary of the key points is shared below.
Value of our endowment
The value of our investments varies with movements in financial markets. At the end of our last financial year, 31 March 2025, the portfolio value was £142 million.
Financial objective
The current financial objective is to achieve a real return of 4% per annum (calculated as a Total Return target of 4% + CPIH) in the long term. CPIH is an inflationary measure and is defined as the Consumer Prices Index including owner occupiers' housing costs.
Spending rate
Our level of proposed spending for the coming year is discussed at the February Finance and Investment Committee Meeting, before being approved by the Board of Trustees in March in the same year. This year, Trustees have approved an annual total expenditure budget of 4% of the Foundation’s net assets (net of investment management fees) averaged over the quarter end values of the last three calendar years.
Total impact approach
The majority of our endowment is invested primarily for financial returns, which fund our grantmaking, mainly in public equities listed on stock markets (i.e. providing secondary capital). Implementation is through external fund managers, appointed to specific mandates or acting in accordance with pooled fund product specifications.
Since 2020, we have developed our thinking on investment so that we now take account of non-financial outcomes alongside financial returns. We refer to this as a “total impact approach". Non-financial outcomes may advance or conflict with our aims and values. Our aims are to:
- Invest in a sustainable way i.e. to support long-term environmental and societal sustainability, with particular focus on helping address the systemic impact of the triple planetary crisis and reducing suffering for people, society and the natural world.
- Be a responsible investor i.e. ensure that our fund managers take full account of environmental, social and governance issues in their investment activities, considering both the underlying risks of a company’s impact on society and the environment as well as the implications for a company’s financial value.
- Encourage our fund managers take a systematic and effective approach to stewardship and engagement, and ask them to actively engage with underlying investee companies or sectors where specific issues are identified that we feel are misaligned with our organisational aim, values and approach.
- Work with other actors, including trusts and foundations, through avenues such as the Charities Responsible Investment Network and the COP26 Asset Owners Declaration in pursuit of the transformation of financial systems, policy and regulation, and institutions to better support long-term environmental and societal sustainability.
- Achieve the above in such a way that any financial returns foregone are outweighed by positive non-financial impacts.
Exclusions policy
Investment in tobacco, thermal coal and tar sands companies is excluded across all holdings, including indirect investment like holdings in pooled funds.
We also do not permit the investment of primary market capital into fossil fuel production and infrastructure, i.e. the purchase of new securities. We feel that providing new investment into these activities is fundamentally misaligned with our organisational aim to advance wellbeing for people, society and the natural world, and is misaligned with the aims of the Paris Agreement, which seeks to keep temperature rises well below 2°C above pre-industrial levels.
Social Investment
In line with the Charity Commission’s CC14 guidance, we define social investment as “investing with a view to both achieving your charity’s purposes directly through the investment and making a financial return.”
In January 2025 Trustees approved our new Social Investment Policy, which can be accessed by clicking here. This Policy outlines in detail our approach to social investing, including our aims, key investment criteria, specific parameters, investment processes and governance approach. Our aim in developing a social investment portfolio is to achieve greater impact with our funds than could have been achieved had we invested for financial returns and given this money out as grants. This means that we will take into account both the financial returns and the non-financial impact of each social investment opportunity, and consider whether these outweigh the value of grants foregone by not investing primarily for financial return.
We intend to work towards investing approximately 10% of our endowment (currently equivalent to c.£15m) in social investments over the coming years. We will develop more specific timescales for this ambition as we build the portfolio, but recognise that this type of investment is a long-term commitment and the full programme will take a number of years to build up.
Looking after our money
Our Trustees are responsible for the endowment and the management is delegated to our Finance and Investment Committee. This Committee sets the investment strategy for the endowment. The funds are managed by carefully selected active managers and are diversified across a range of asset classes. We currently have six fund managers who determine the asset allocation of their own portfolios. The Committee also takes advice from specialist consultants.
We are currently invested in products with the following fund managers:
- CCLA
- Charities Property Fund
- Fulcrum Asset Management
- GMO UK Limited
- Newton Investment Management Limited
- Ruffer LLP
We receive investment advice from our investment advisors at Stanhope Consulting.
