Building an Impact-focused Endowment: Early Principles
As we work to address the racial wealth gap through innovative investment approaches, we believe transparency and collective learning are crucial. This post outlines our emerging principles and the systemic challenges we're aiming to tackle
At Pathway Fund, our long-term ambition is to mainstream racial equity in investing. We believe in a future whereby economic resources and opportunities are fairly distributed across all communities. Through our planned endowment, we aim to catalyse equitable access to financial resources for Black and Ethnically Minoritised-led organisations, working to enhance social, economic, and cultural well-being for historically excluded communities.
The racial wealth gap in the UK continues to widen – Black African & Bangladeshi households in the UK have 10 times less wealth than White British people (The Runnymede Trust). Therefore, as we begin shaping our endowment investment strategy, we wanted to share some key principles emerging from our early discussions with our advisors (Tara Sabre Collier, Chemonics UK and Sarah Santhosham, The Scott’s Trust Endowment).
Three core themes are guiding our thinking:
Systems-level change requires patient, intentional capital: We're exploring how an endowment could help expand the scope of financial products, ownership structures, and wealth creation mechanisms to include Black and Ethnically Minoritised communities. From access to property to pension inequities, the current system perpetuates racial economic disparities that require structural solutions.
The power of evidence and demonstration: Any future endowment would need to show that taking a racial equity lens doesn't mean compromising returns. We need to move beyond diversity initiatives to fundamental changes in how capital is allocated, building confidence through real-world examples rather than just theory. While we acknowledge building an evidence-base can take multiple years, we are now ready to start that journey.
Innovation balanced with pragmatism: We're thinking carefully about how to combine established investment approaches with new models that better serve our communities. This means tackling immediate challenges around housing access and enterprise support, while also preparing for emerging risks like AI bias that could further entrench racial inequities.
Our approach is anchored in two fundamental principles:
Racial equity - ensuring no one is left behind by targeting resources to dismantle historical barriers
Economic equity - building systems that ensure fairness in the generation and distribution of economic wealth and assets in our society.
While we are still developing our strategic approach, we are committed to learning openly, building thoughtfully and would like to thank those who have patiently guided and shared their knowledge with us (Kataly Foundation, McConnell Foundation, The Nathan Cummings Foundation, Joseph Rowntree Foundation and Intentional Endowment Network)
We believe that investing with a racial equity lens can deliver both, increased social impact and financial returns, creating lasting change in how capital flows through our communities. Watch this space as we continue engaging with communities and sharing more as our thinking evolves.