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2019 Year in Review

Reflection’s from our CEO and President Don Howard

As I reflect on 2019, I see encouraging signs that California is taking real steps forward to address economic inequality and increase opportunity for working people, particularly those earning low wages.

I am especially encouraged by the inspiring and effective work of the grantees in our Better Careers, Fair Work, and Priority Regions initiatives. Their innovative, passionate, and tenacious efforts are empowering low-income workers each and every day to advance economically.

Meanwhile, California’s new governor put in motion a bold agenda to create more opportunities for working people, build inclusive economies in inland California, and advance worker protections (including fighting wage theft so that hardworking Californians receive every penny they earn). And, in the private sector, leaders are increasingly realizing that improving career opportunities for entry-level workers is both the right thing to do and good for their long-term business success.

These encouraging signs are just a start; there is still much work to do. Too many jobs in our state pay extremely low wages without clear opportunities to advance. More than one-third (35%) of Californians earn less than $15/hour — and African Americans and Latinos disproportionately so. In fact, half of California’s Latino workers make less than $15/hour.

Coupled with our high cost of living, California still has the nation’s highest poverty level of any state. One study we commissioned in 2019 found that nearly four in 10 Asian American and Pacific Islander workers are struggling with poverty.

We are convinced that reducing income inequality will require leaders from across society to build bridges and work together to restore balance to our economy and dignity and fairness for all workers. I’m excited that we have the privilege to support these partnerships with financial and moral support.

Here are highlights from our work in 2019 to partner with and support nonprofits, worker groups, the public sector, and employers:

Nonprofits

  • We invested $22 million in 34 Better Careers grantees who are connecting more Californians to higher-wage jobs with advancement opportunities, while also strengthening their abilities to train workers, partner with employers and the public sector, and advocate for improved workforce development policies. We made $21 million in grants to 21 Fair Work grantees who are organizing low-income workers to advocate for their rights and fight wage theft, partly through a partnership between worker centers and the California Labor Commissioner.
  • In our Priority Regions, Irvine invested nearly $6 million to expand partnerships with local leaders and organizations who are strengthening community capacity to build a local economy that works for all residents. In a series of listening sessions in Fresno and Salinas, community leaders shared the opportunities and challenges they face in building a thriving, racially inclusive economy — and provided insights into how funders can best support the work.
  • We partnered with The Institute for the Future to explore immigration trends that will impact California and the country. Immigration policy experts, advocates, and other immigration funders generously advised this project, which resulted in a futures map: four plausible immigration scenarios and their implications for the economy. We plan to use this foresight to determine how we continue to support Immigrant families who make up a large share of low-income workers and who contribute to California’s creativity, innovation, and economic strength.
  • We made exploratory grants of $6.2 million, largely to community advocates and policy analysts, to learn if our resources can help expand housing that low-income workers can afford.

Labor organizations

  • In addition to the worker centers at the core of our Fair Work initiative, we explored how we might partner with traditional labor unions to educate, empower, and protect the rights of workers. Several union federations are developing promising innovations, such as the California Labor Federation and the Los Angeles Labor Federation, and we are proud to support their efforts to grow career pathway programs for the formerly incarcerated, immigrants, and other workers.

Public sector:

Employers:

  • Employers play a role in much of our work, so we developed a new direct engagement approach, including six employer roundtables to hear the challenges and opportunities they see in hiring, retaining, and advancing entry-level workers.
  • We invested in a new model, Talent Rewire, to help employers hire and retain jobseekers who are often overlooked in the hiring process.

 

Every year, Irvine’s Leadership Awards recognize leaders from across sectors who are advancing effective solutions to California’s toughest issues. In February we recognized five leaders – all women, for the first time in the Award’s history – for their groundbreaking solutions to homelessness, youth development, health care, and aging. Learn more about our 2019 recipients here.

Last, but certainly not least, in October the Irvine Foundation board elected a new board Chair. Kafi D. Blumenfeld, who joined the board in 2016, took over for outgoing Chair, Lydia Villareal in January. In December, the board also elected a new trustee, Dr. Michael Chui. Irvine’s board members have been invaluable partners in guiding our strategy, and I look forward to benefiting from Kafi and Michael’s expertise in the years ahead.

I’m proud of all the work Irvine’s partners, staff, and board did in 2019 to expand opportunity for the people of California — and I see 2020 as a pivotal year.

I’m hopeful that momentum from 2019 will persist, and I look forward to building more partnerships with leaders and organizations who are committed to building an economy that works for all Californians. Thank you.

Portfolio Review

Our Grantmaking Portfolio Review was shared with Irvine’s Board of Directors in March 2020, reflecting our work and conditions in 2019, prior to COVID-19 and the resulting economic fallout. The review explores the challenges and opportunities for working Californians who earn low wages, and outlines the Foundation’s approach to grantmaking, our allocation of resources, and an update on our staff and organizational culture.

The California we live in today is dramatically different from the one reflected in this document, but it helps us understand and communicate how strategy development, talent management, finance and investments, and operations come together to achieve our goals.The Portfolio Review is a useful tool each year to inform and guide our decisions moving forward.

Foundation Statistics

Click through the graphics below to explore our 2019 grantmaking and staff and board demographics.

A letter from our CIO

The purpose of our investment portfolio is to provide the financial resources to fulfill our vision of a California where all low-income workers have the power to advance economically. Fortunately, our long-term returns have allowed us to grow our grantmaking capacity over time and our endowment finished 2019 at a record $2.5 billion. As a result of strong historical investment results, Irvine’s annual grants budget increased from $86 million in 2016 to $106 million in 2020. This growth in grantmaking resources is an important element in supporting the Foundation’s impact.

Our investment team is fully staffed as we enter 2020. We added a new Investment Director in January 2019 and a second Investment Associate in June 2019. With the team fully in place, we are focused on living our Investment Principles, which are the foundation to operating as a high-performance team.

Irvine’s Investment Principles

  • We are a long-term investor
  • We believe that relationships matter
  • We value independent thinking
  • We are a conviction-based investor
  • We are a flexible and nimble partner
  • We are intellectually curious
  • We align Irvine’s interests with the interests of our partners

Irvine’s Portfolio Results

Partnering with top investment managers helps Irvine to continuously evolve our investment strategies. Like many endowments and foundations, Irvine’s investment portfolio has a significant exposure to equity securities, both public and private. This includes a meaningful exposure to venture capital. While we have benefited from this positioning long-term, we are pleased that in 2019 the process began for Irvine to receive liquidity on some of our biggest venture capital successes. We hope this will continue during 2020. As a long-term investor, it is important to measure performance over long time periods, especially when the portfolio has a significant amount of private investments. The Foundation has been rewarded as a long-term investor, generating more than an 11 percent portfolio return over the past 10 years. Two key contributors drove Irvine’s long-term returns: superior manager selection and an overweight to quality private investments. Irvine’s disciplined approach to portfolio construction, with a focus on conviction-based investing, allows Irvine’s portfolio to generate strong long-term returns.

We also took an opportunity to look at our portfolio through a different lens in 2019 and examined the diversity of our managers. We focused on senior positions that have real economic representation within a firm, and we excluded support positions such as the CFO, general counsel, head of human capital, etc. that are already commonly filled by women. Our desire is to have a more realistic representation within the most highly compensated positions. Of our top 25 managers, which account for 82 percent of our assets, about one-third have more than half of their senior professionals represented by women or people of color (Black, Latinx, or Asian). Another one-third have 25-50 percent of their senior professionals represented by the same group, and the final one-third have less than 25 percent representation. While we believe our results are better than the industry, that is a low bar given the investment industry’s significant underrepresentation.

We would like to thank our investment partners for their contributions in allowing us to increase our grantmaking budget and our ability to support organizations working to expand opportunity for the people of California.

Best,

Tim Recker