So, while articles like the Times series can in some cases lead to changes, much broader improvement in investment practices is more likely to happen when foundation leaders see their peers make good use of investment assets, and most importantly, when those peers receive praise and recognition for doing so. Given its sheer size and the energy it has shown in its philanthropic work to date, we shouldn’t be surprised to eventually see the Gates Foundation help lead the way.
My take is that foundation CEOs get to play the role of corporate CEO when it comes to managing their investment portfolios, and in that role they think no differently than your average shareholder-value-obsessed executive. There's a fair amount of penis envy [with all due apologies to Susan Berresford] among the larger foundations when it comes to asset size and growth, in part driven by a news media that cares more about dollar amounts than anything else [and that includes the philanthropic trade media, perhaps the worst offenders].
On one count Manzo is exactly right. When a number of foundations stick their necks out and adopt uncomprising socially responsible investment policies, other foundations will follow. Especially when "those peers recieve praise and recognition for doing so." Never underestimate the power of the ego stroke. It may be the best motivator for change in the world of institutional philanthropy.