Stephanie Cordes: An “All Resources” Approach
The Vice-Chair of the Cordes Foundation on their approach to Impact Investments & Financial Sustainability
“When I joined the foundation, 40% of the portfolio was in impact investments. But I began to question why all our investments weren’t impact investments.”
Stéphanie Cordes, vice chair, the Cordes Foundation
Leaving a coveted position as an advertising executive at fashion publisher Condé Nast to join her family’s foundation was not how Stephanie Cordes had originally envisaged her career path.
"It was my dream job,” she says. “My parents started the foundation when I was 16, and at the time I couldn’t see how fashion and philanthropy would overlap."
This all changed on a trip to Mexico, where she attended Opportunity Collaboration, a retreat bringing together hundreds of non-profit executives, impact investors and social entrepreneurs focused on reducing poverty. “I was so inspired by all the people and the conversations I was having,” she says. “Everyone was waking up each day feeling like they had a purpose.”
Ms. Cordes had been exposed to her family’s giving from an early age. As a child she travelled regularly with her parents on trips related to the foundation’s grant-making, such as distributing medicine in El Salvador.
The family’s foundation also exposed her to new forms of philanthropy now being embraced by many in her generation. In 2006, after selling his investment services firm for US$230m, Ron Cordes, with his wife Marty, created a family foundation and embraced the idea that social enterprise and impact investing could help people to improve their own lives.
While continuing to make grants, from 2007 he began using the foundation’s endowment to make impact investments.
In this strategy, his daughter is even more ambitious. “When I joined the foundation, 40% of the portfolio was in impact investments,” she says. “But I began to question why all our investments weren’t impact investments.”
This, she argues, can increase the impact of the foundation’s funds, as 95% of the endowment is invested while only 5% is given away each year in grants.
"Our grants are typically smaller and are made on an annual basis, while our investments tend to be more substantial and longer-term,” she says. The investments have also delivered healthy returns of about 8%, with seven out of 11 public equity strategies, screened for environmental, social and governance factors, outperforming their benchmarks.
This ability to generate financial sustainability is important to Ms Cordes, who wants the foundation to exist in perpetuity. “I’ll pass it down to my children and the next generation,” she says.
Tapping into her fashion industry experience, she has started using grant funds to support organisations that provide developing-world artisans with economic opportunities and connections to western markets. In doing so, Ms Cordes has come full circle: she has found a way to tie her old life in business to her work as a philanthropist.
This article is taken from the 2017 BNP Paribas Individual Philanthropy report “Passing the torch: Next-generation philanthropists”, written by The Economist Intelligence Unit.