Trust announces socially responsible investing; focuses grantmaking on systems change strategy to commemorate its 75th anniversary
WINSTON-SALEM—The Kate B. Reynolds Charitable Trust, one of the largest private funders in North Carolina and the largest in Winston-Salem, announced today that it will divest from tobacco and instead commit to a socially responsible investment strategy to support community-led businesses and economic opportunities in North Carolina.
The announcement was made at the Trust’s 75th-anniversary event titled, Looking Back, Working Forward. The Trust outlined both its new investment strategy and explained its revised approach to grantmaking focused on changing systems to ensure equitable health, education, and economic outcomes for all residents.
The Trust was founded in 1947 when Kate Bitting Reynolds left $5 million in R.J. Reynolds Tobacco Company stock with instructions to establish a trust in her name dedicated to improving the quality of life for people with low incomes in Forsyth County and improving health care around the state.
Today the Trust has approximately $575 million in assets and awards roughly $20 million in grants, or 5 percent, annually to further the contemporary version of her vision – ensuring that all North Carolinians have the opportunity to thrive. The remaining assets are invested in stocks and other financial instruments to ensure its ability to continue giving grants.
“A significant portion of our assets has been traditionally invested in tobacco, per Mrs. Reynolds’ will. Yet, at the same time, we have been working to improve the health of residents whom tobacco may have harmed,” said Dr. Laura Gerald, president of the Trust. “While we cannot change where our funds originated, we are responsible for using them wisely, addressing any past harms, and eradicating the roots of the problems that face our state.”
Working closely with its trustee, Wells Fargo, the Trust is changing its investment approach to invest in companies that are economically important to the state. Specifically, Wells Fargo is:
- Taking steps toward excluding tobacco producers from the range of companies that the Trust invests in and will work to eliminate direct exposure to tobacco companies by the end of this year.
- Allocating $100 million of the Trust’s public equity investments in a dedicated strategy designed to invest more heavily in companies that are economically important in North Carolina. This portion of the portfolio holds 10 times more equity in NC-based companies than the funds it replaces and 13 times more in companies that hire more North Carolinians than their peers.
“The Trust has made an imperative of taking responsibility by having a greater impact on the people Mrs. Reynolds asked us to serve, and one of the ways to do so is by collaborating to align investments with the Trust’s values,” said Tom Weizenegger, portfolio manager for Wells Fargo Institutional OCIO. “These are two significant steps in that direction.”
In addition to announcing the change in investment strategy, the Trust took an honest look back at its history and outlined how that history necessitates a revised grantmaking approach. The event highlighted the many accomplishments of its grantees in areas like access to care, mental health, and child and family wellbeing over the past 75 years but also took a critical look at the source of the money that funded those achievements. Dr. Gerald noted that Mrs. Reynolds’ initial bequest came from tobacco and the sale and labor of enslaved Black people who worked in the tobacco fields.
With that complicated history in mind, she noted that moving forward the Trust will continue to focus its grantmaking on strategies and initiatives that center racial equity, focus on changing inequitable systems, and building the power of people who have been marginalized and oppressed to achieve its mission of improving the quality of life and health for all.
“We may not have built this house in our time, but we need to identify and make the appropriate repairs to its foundation, to heal and work together to achieve the outcomes we seek,” said Dr. Gerald. “I never met Mrs. Reynolds but based on her legacy, I’d like to think that is exactly what she would want us to do.”