2023 ANNUAL REPORT

Letter from the President & Board Chair

2023 was the first year since the start of the pandemic in 2020 that felt like something of a return to normality. Gates Family Foundation has settled into operating in a hybrid mode, with everyone in the office on Tuesdays and Thursdays, and flexible the other days. This past year was also the second full year implementing the direction established in the Foundation’s most recent strategic plan, completed at the end of 2021.

2023 by the Numbers

Over the course of 2023, the Foundation distributed just over $43 million through 378 grants. Of this total, 231 grants totaling $12.44 million were made through the main Foundation. 43 percent of these grants (or 109 total) were focused in rural communities, and another 35 percent (or 64 total grants) had statewide benefit.

The balance of $28.7 million in grantmaking occurred through the eight family funds held at the Foundation. These funds allow individual or groups of family members to use the infrastructure of the Foundation to engage in philanthropy that may have a different topical or geographic focus than the main Foundation.

Included in the family fund total was the second payment of a five-year, $100 million commitment by the Gates Frontiers Fund to accelerate the work in bioscience, regenerative medicine, and gene therapies at the University of Colorado Anschutz Medical Campus. This historic commitment — the largest single commitment in the Foundation’s 78-year history — will support the work of the Gates Institute in accelerating cutting edge solutions to a host of global health challenges.

Highlights of the Foundation’s grant awards and impact investments in 2023 include:

• K-12 Education — 60 grants to 57 organizations totaling $3.99 million;
• Natural Resources — 31 grants to 28 organizations totaling $3.01 million;
• Community Development — 58 grants to 52 organizations totaling $2.50 million;
• Informed Communities — 8 grants to 6 organizations totaling $763,000;
• Capital Grants — 113 grants totaling $4.89 million. Since 2011 Gates has distributed $48.4 million through 846 grants through the Capital Grants program.
• Impact Investing — In 2023, the Foundation made five mission-related private equity and private credit commitments totaling $8.5 million. The Foundation also made four program-related investments in 2023 totaling $2.0 million.

Consistent with the direction established in its most recent strategic plan, the Foundation has elevated its focus on climate, and prioritized supporting indigenous communities, communities of color, low-income households, and rural communities.

Impact Investing

Gates Family Foundation has continued its objective of targeting up to 30 percent of its new private equity and private credit commitments for mission-related investments (MRIs). The Foundation also seeks to deploy 6 percent of the main Foundation’s assets (measured on a rolling three-year average) as program-related investments (PRIs). The Foundation makes these commitments above and beyond its commitment to distribute more than 5 percent of its assets as grants annually. These PRI commitments are a mix of low- or no-interest debt, guarantees, direct deposits, equity investments, and pay-for-success models.

The Foundation’s MRI and PRI portfolios have both grown considerably in recent years. At present, the MRI portfolio contains 30 investments totaling $49.1 million in commitments. These investments mirror the range of interests reflected in the Foundation’s grantmaking – climate, land conservation and restoration, sustainability, economic mobility, sustainable forestry, social inequality, bioscience, deep tech, rural venture, affordable housing, etc. The PRI portfolio at year-end in 2023 contained 23 commitments totaling more than $18 million. Like the MRI portfolio, the PRI portfolio spans the range of the Foundation’s core interests including economic mobility, small business development, affordable housing, public education, climate, water resources, and local news and media.

In 2023, the Foundation made five new MRI commitments: Lyme Forest Fund VI, Rose Affordable Housing Preservation Fund VI, Prudential’s Essential Property Partners II Fund (an affordable housing and catalytic real estate projects fund), Ecosystem Integrity Fund V, and Lafayette Square (a private credit vehicle providing capital to businesses that invest in and support their workforce).

The Foundation also made four new PRI commitments in 2023. These commitments included creation of a predevelopment fund for long-term affordable homeownership with Elevation Community Land Trust, deposits with First Southwest Bank to support community development work, a line of credit with the National Forest Foundation to support their high-altitude wetland mitigation banking program, and an investment in transitional housing for adults overcoming alcohol and substance abuse through Sober Living Apartments.

Board and Staff

Dick Celeste

The Foundation experienced several board transitions during 2023. After completing 12 years of dedicated service, Dick Celeste reached the maximum term limit and left the board of trustees at the end of the year. Dick was an amazing contributor, a great thought partner, valued friend, and brought joy, laughter, and wisdom to all of our efforts.

Ernest House, Jr.

We are excited that Ernest House Jr. was elected to join the board as a community trustee to fill the vacancy created by Dick’s departure. Ernest is a senior policy director at the Keystone Policy Center. He served under multiple Colorado governors as leader of the Commission of Indian Affairs. Ernest is a member of the Ute Mountain Ute tribe, and serves on the boards of Fort Lewis College, The Nature Conservancy, Conservation Colorado, the National Western Center Authority, the Colorado Inter Basin Compact Committee, and the Weenuchu Development Corporation of the Ute Mountain Ute tribe.

Also at the start of 2023, Rich Kiely agreed to step in as the chair of the board, succeeding Dane Harbaugh, who had the unenviable task of chairing the board for three years (2020 through 2022) during the height of the pandemic and all of the challenges and opportunities it presented the Foundation during that period of time.

There were also multiple staff transitions during 2023 that have carried into 2024. The Foundation elected to convert a vacancy in the education team into an opportunity to add a Director of Learning and Evaluation to the staff. After an extensive search that yielded many talented candidates, the Foundation selected Cristina González-Avram for this new role. Cris started in August of 2023. Cris most recently was Vice President of Impact Services at ResultsLab, a Denver-based consultancy supporting nonprofit and for profit clients. Prior to that, Cris played program and operational roles with a large environmental nonprofit serving school-aged children, and worked at a national institute designed to strengthen Tribal capacity and sovereignty in environmental and natural resources management though culturally relevant education, research, partnerships, and policy-based services.

Mary Seawell and Carol Menard

In July 2023, Mary Seawall transitioned from the Foundation’s staff to full-time leadership of Lyra Colorado. Mary was part of the Gates staff for more than 10 years and led the Foundation’s public education work for many years. Gates helped launch Lyra Colorado in 2019, with a focus on climate education and career paths, innovation zones, and other educational innovations. Gates loaned Mary to lead the Lyra Colorado work for more than three years, and incubated and housed the organization within the Gates’ offices. Gates remains a funder and partner of Lyra Colorado.

Towards the end of 2023, the Foundation launched a search for a new leader for the Foundation’s education program. More than 140 people applied. After an exhaustive search process, Russ Ramsey was selected to lead that body of work. Russ has a long history as a teacher, teacher coach, school leader, and education researcher. He also led the education program at the Houston Endowment, a large, place-based private foundation in Houston, Texas. He also served as the Houston Endowment’s Learning and Evaluation Director. More recently, Russ has played a senior leadership role within Denver Public Schools, managing a diverse portfolio of responsibilities including enrollment, school choice, planning and analysis, real estate, and facility allocation.

In November 2023, the Foundation celebrated office manager Carol Menard’s 25 years of service. At the end of the year we also bid farewell to Sue Dorsey, the Foundation’s Senior Vice President for Finance, Administration, and Impact Investing. Sue was with the Foundation for more than seven years, and along with Controller Anna Schmid, did an amazing job of modernizing all of the Foundation’s finance and operational systems. Sue also helped build the Foundation’s impact investing functions, creating high-performing PRI and MRI portfolios. Sue was universally loved and respected within and outside of the Foundation. While a loss for the Foundation, the entire organization recognizes she was leaving to take on a great opportunity as the Chief Operating Officer of iAlumbra, a network of social enterprises, businesses, and philanthropic efforts advancing environmental, social, and economic change domestically and internationally. The Foundation launched a search in January 2024 to find Sue’s replacement.

Finally, in 2023 the Foundation once again hosted a GIV (Growing Insight and Voice) fellow in collaboration with local nonprofit YouthRoots. The fellowship gives young adults an opportunity to be part of a cohort learning about philanthropy and the nonprofit sector as well as the chance to be embedded with the staff of a host foundation. Gates’ 2023 fellow was Grayson Cowan.

Other Noteworthy Items

In general, financial markets rebounded in 2023, and the Foundation finished the year with $583 million in assets and an annual rate of return of 11.9 percent in the investment portfolio for the year. Highlights of 2023 included the formal launch of the Colorado Mass Timber Coalition with an in-person kickoff in September at the Denver Museum of Nature and Science. 2023 was also an active year in terms of expanding the Foundation’s work in affordable housing and economic mobility. The year saw continued progress in the informed communities work, including the Colorado Media Project stepping forward to lead the Colorado chapter of Press Forward, a nationwide philanthropic effort to drive greater investment in trusted sources of local news. The education team supported the work of Lyra Colorado’s Climatarium initiative, which brings climate education and career pathway opportunities to high school students in rural regions across the state. In the capital grants area, the Foundation worked on updating its capital projects planning guide and also partnered with the Association of Fundraising Professionals to create a statewide, searchable database of active capital projects.

Looking Forward

The Gates Family Foundation board and staff extend our sincerest thanks to all of the grantees, partners, and allies that we had the opportunity to work with in 2023. We look forward to continuing to engage with partners and communities in 2024 to advance the Foundation’s mission to build a more equitable, resilient, and sustainable Colorado for all.

Sincerely,

Thomas A. Gougeon
President
Gates Family Foundation

2023 Financials