Mastercard Foundation Suggests Diversified Investment Approach to Achieve Philanthropic Goals

The Mastercard Foundation, in consultation with Mastercard Incorporated (NYSE: MA), filed an application with the Ontario Public Guardian and Trustee for a court order to modify its Deed of Gift.

Once the order is granted, the changes are “expected to deliver greater flexibility in the Foundation’s long-term investment and operational strategy to support its philanthropic mission.”

Mastercard and its then-shareholders in 2006 “created the independent foundation through a gift of company stock as part of its initial public offering.”

The performance of Mastercard’s stock “over the past 17 years has led to the Mastercard Foundation developing into one of the largest charitable foundations globally with assets of approximately US$37 billion.”

Since the Foundation’s formation, its stockholdings in Mastercard “have served as its sole source of funding.” The original Deed of Gift “restricts the Foundation from selling its shares of Mastercard except as required to meet the Canadian disbursement quota and related operational needs until May 1, 2027.”

At that point, the Foundation is “permitted to diversify its holdings and scale charitable programming spending, provided it does so in a structured and orderly way so as not to unreasonably disrupt the market for Mastercard stock.”

Today’s filing seeks permission “to commence the diversification process on January 1, 2024, and is part of the Foundation’s operational growth and investment strategy.”

Reeta Roy, president and CEO of the Mastercard Foundation, said:

“The creation of an independent Foundation through a significant gift of stock was an unprecedented act of generosity of Mastercard and its shareholders. The growth of the value of the Mastercard stock has enabled the Foundation to pursue its mission and create lasting impact. We believe a diversified portfolio sets us on the path to further expand our work and impact, investing in the people and programs necessary to deliver on our mission — a world where everyone has the opportunity to learn and prosper.”

The Foundation has “consulted with Mastercard on the diversification of its endowment if its application is successful.”

The Foundation maintains confidence “in the strength of the Mastercard stock and will retain its name and branding, reinforcing the shared values with Mastercard of doing well by doing good and promoting financial inclusion.”

In addition, the Foundation and Mastercard have “entered into a non-binding Memorandum of Intention and Understanding (MOI) to document the Foundation’s commitment to an orderly sell-down and the ongoing belief in the strength of the stock.”

The Foundation currently plans “to sell the Mastercard stock over seven years and retain a significant overweight holding of Mastercard in its portfolio.”

Tim Murphy, chief administrative officer of Mastercard, said:

“The Foundation and its ability to thrive for the long-term is a lasting legacy of our company. Even as we have operated independently, our respective work has helped to expand financial inclusion and inclusive growth around the world. We believe the steps outlined in the filing provide for an orderly diversification of the Foundation’s holdings and look forward to a continued relationship with the Foundation team for years to come.”


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