While Steven Rogers was serving as a trustee of Williams College in the 2000s, the business school professor urged his alma mater to invest at least some of its endowment dollars with Black-owned asset managers. He appealed directly to the chairman of the college’s finance committee.
“I met with him, went to his office, gave him an actual list of fifty Black-owned financial services firms,” said Rogers, who recounts this story in his forthcoming book, " A Letter To My White Friends And Colleagues."
“I gave him the whole pitch that Black-owned financial services firms were providing market-rate returns, that this was not a charity program,” he added.
His appeal did not prompt immediate action.
“He basically engaged in passive-aggressive behavior and did nothing, probably for a year. Finally, my frustration got to me and I announced at the trustee meeting that I was going to resign,” said Rogers, a 1979 graduate of Williams who served on the board from 2003 to 2008 while teaching at Northwestern University's Kellogg School of Management.
Only then, he said, did the board's chairman step in and promise to address the situation. “A few weeks later, we hired our first Black financial services manager,” Rogers recalled. The college's endowment crossed $1 billion around that time and has recently soared above $3 billion.
As the country undergoes a racial reckoning, GBH News surveyed Williams and ten other colleges in Massachusetts with large endowments and asked how many asset managers they invest with are Black or brown. The schools manage endowments approaching $80 billion in total and profess diversity, equity and inclusion as core values. They also receive federal funding, which requires them to abide by anti-discrimination laws in all activities.
The collective answer: They're not saying much.
"There isn't much of an appetite” for participating in the survey, a Williams spokesperson wrote in an email. Most schools, including Tufts University and Amherst, Wellesley and Smith colleges, said that they don’t publicly release the number, names or descriptions of the investment firms they engage. Two schools — Boston College and Northeastern University — never responded.
Only Harvard University and the Massachusetts Institute of Technology provided any data. Both lumped together figures on firms owned by people of color with those controlled by women and veterans. The schools declined to provide a more detailed breakdown of the numbers.
Seth Alexander, president of the MIT Investment Management Company, said the university’s leadership encourages existing managers to become more representative of the population.
“MITIMCO’s mission is to deliver outstanding long-term investment returns to sustain MIT’s pursuit of world-class education, cutting-edge research and groundbreaking innovation,” Alexander said in a statement. “Critical to that is ensuring that we are partnering with the best talent — and that includes learning from and acting on a diversity of ideas and insights.”
Other schools said they don’t have the requested information on hand.
“They have it. They’re not ready to talk about it,” said Robert Raben, who runs the Diverse Asset Managers Initiative in Washington, D.C.
Raben said finance is one of the few industries in the country whose leaders still say publicly that race doesn't matter.
“The conventional wisdom is that if you have good returns, of course, we'll work with you. And we sort of poked at that premise and said, ‘Well, there's plenty of people of color with great returns. Why aren't you working with them?’” he said.
Raben said structural racism and insular networking are behind the problem. White men own nearly 99% of asset management companies.
Earlier: To Narrow Inequities, Some Colleges Invest In Minority-Led Funds
"The exclusion of people of color in leadership in financial services generally is really, really stupendous," Raben said. "It's a very, very, very parochial sector of the American economy. The number of asset managers themselves is rather small, and they travel together. The white men who dominate the field don't have great exposure to people of color who are doing well in the field.”
Last summer, after the police killing of George Floyd, Raben convinced former Rep. Joe Kennedy III, D-Mass., to send a letter to the 25 universities with the largest endowments, totaling hundreds of billions of dollars, requesting information about how that money was invested, who was managing it and, Kennedy explained, “whether or not those investments were reflective of some of the values of diversity that those very same educational institutions had promised and protected when it comes to their admitting class.”
Those institutions vary in how aggressively they are trying to address the lack of diversity in their investment portfolios, he learned, but “the bottom line is that this has not been a priority.”
That broader group of schools did not provide Kennedy with hard data either.
Kennedy acknowledged part of the problem is that there are not nearly enough people of color in money management positions. “These institutions can help drive and catalyze that change,” he said.
But college leaders are entering the debate cautiously.
“If we want to promote a certain social justice vision of how our assets are managed, let's do that in a more comprehensive way,” said Vincent Rougeau, dean of Boston College’s Law School and the incoming president of the College of the Holy Cross, which also would not disclose how many Black and brown-led asset firms it invests with.
The college’s endowment is worth more than $900 million and has relationships with 41 investment managers. Financial officers said Holy Cross is currently in changing the leadership and management of its endowment, with the goal of engaging a diverse set of managers.
"As a result, our manager lineup is changing significantly,” said Dan Ricciardi, the college's assistant treasurer, who is overseeing the transition. “The college strongly believes that the success of our investments depends on finding the most talented managers. And to find the most talented managers, you need to make sure that you are casting a wide net to find firms that have professionals with diverse backgrounds, ethnicities and life experiences.”
In July, Rougeau will become the first lay and first Black president of the Jesuit college in Worcester. He told GBH News that he is open to reconsidering how the college’s assets are managed, but he also expressed some skepticism about the immediate impact.
“It's not like you can flip a switch and change the structure of who manages money in this country,” he said. “You don't want to put yourself in a position where you're trying to do something when the resources or the people just aren't even there.”
Advocates disagree with that perspective.
“When you have a problem, you don't try to eat the entire apple," Rogers said. "You take bites of it."
When it comes to diversity and equity, he said, symbolism and token investments won’t make enough progress.
“We need people who are going to be change agents, who are going to actually have as a mandate, how we are going to include others,” he said. “We need champions. We need warriors.”
In 2011, Rogers was teaching business at Northwestern when Harvard law professor Charles Ogletree invited him to join a group of five black faculty members preparing to make a pitch to Harvard similar to the one he had made years earlier at Williams.
"Prior to our meeting, the other four said, ‘Steve, you’re our Johnnie Cochran. You make our case,'” Rogers recalled.
Their case was to convince Harvard’s chief investment officer to place $1 billion from the school’s $30 billion endowment — the largest in the country — with Black financial firms.
“I'm real big on helping black businesses get access to capital — but not just simply for the symbolism of a Black business, because Black-owned companies hire Black people, Black-owned companies send philanthropic dollars to the Black community," he said. "So for me, it's a means to an end.”
After he made the pitch, Rogers said, the chief investment officer looked at him sideways.
"He said, 'You’re trying to get me fired? Wow. That's a lot.’ And I said, ‘Actually, I'm trying to get you promoted,'" Rogers said with a laugh.
Rogers, a graduate of the Harvard Business School who retired from its faculty in 2019, said he does not know what the outcome was.
