Ares Management Corporation (“Ares” or the “firm”) is a leading global alternative investment manager. In 2021, the firm launched the Ares Charitable Foundation (the “Ares Foundation”), which seeks to help accelerate equality of economic opportunity globally.
The Ares Philanthropy team engaged FSG to ensure the Ares Foundation was strategic from its outset so that they could understand if—and to what extent—its grant-funded initiatives made a measurable, meaningful, and sustained difference. They also sought to define an overarching strategy across the firm’s Global Philanthropy efforts that included shared, key objectives and metrics to track and report progress over time. The Ares Philanthropy team and FSG sought to intentionally involve Ares employees throughout this process and build on the firm’s culture of empowering employees to help drive positive change through community engagement and leadership.
The Ares Foundation awards grants to nonprofits across the world whose programs provide career preparation and reskilling, encourage entrepreneurship, and deepen individuals’ understanding of personal finance. In addition to employee-driven grantmaking across the globe, the Ares Foundation supports three signature initiatives:
- Climate-Resilient Employees for a Sustainable Tomorrow (“CREST”), a $25 million commitment to prepare and reskill individuals for green jobs[1]
- AltFinance, a $30 million commitment to help Historically Black College and University students prepare for careers in alternative investment management[2]
- Ownership Works, a $1 million commitment to help companies establish employee ownership programs that seek to help increase wealth for working families[3]
To support the Ares Foundation’s work, employees donate cash, equity, and/or a portion of their realized proceeds from carried interest in select cases, and the firm commits up to 5% of its annualized, realized net performance income from select funds to support grantmaking and operations.
In addition to the Ares Foundation, the firm’s Global Philanthropy efforts include Ares in Motion (“AIM”), a long-running employee engagement program that empowers team members to support local communities and charities, and Corporate Contributions, which provide sponsorship and support for causes and charitable activities important to Ares employees.
The Process
The ProcessFSG’s partnership with the Ares Philanthropy team began in early 2022 to design regional grantmaking strategies and an evaluation framework that would help enable strategic clarity for the Ares Foundation. First, FSG conducted interviews with internal stakeholders and Ares Foundation grantees to understand their aspirations for impact. Additionally, FSG facilitated workshops with team members who serve on the Ares Foundation’s grantmaking committees to determine relevant and appropriate regional grantmaking strategies in alignment with the funding priorities. This required performing regional landscape analyses that included extensive secondary research, particularly on issues in personal finance and entrepreneurship in the U.S., Europe, and Asia to understand what types of nonprofits and populations in each are in greatest need of support.
The research revealed similar systemic barriers (e.g., a lack of access to capital creates challenges in multiple funding priorities), which highlighted opportunities for synergy across not only these regional strategies, but also the Ares Foundation’s signature initiatives. This work informed theories of change and a set of strategic options for each region, including goals, potential partners, and data measures to evaluate impact.
As FSG and the Ares Philanthropy team collaborated to develop regional grantmaking strategies, employees expressed enthusiasm for the Ares Philanthropy team’s innovation and commitment to continuous learning, but they also wanted to understand how these regional grant strategies align with all that the firm does philanthropically. Simply put, they wanted a clearer articulation of strategy and overall goals for Ares Global Philanthropy.
To develop an overarching strategy for this body of work, FSG reviewed past AIM and Corporate Contributions data and activities, identifying synergies across programs, opportunities for increased potential investments, and areas where Global Philanthropy might reduce its efforts. FSG also reviewed employee engagement and other philanthropic practices across eight peer firms in private equity/alternative investments. Throughout, FSG remained in close partnership with the Ares Philanthropy team to make meaning of the data, review early insights, and ultimately align on a clarified path ahead.
The Results and Their Implications
The Results and Their ImplicationsCorporate philanthropy and social responsibility efforts often concentrate impact measurement on total dollars invested or the scale and reach of programs; however, it can be challenging for CSR leads, corporate leadership, and employees to understand if those initiatives yield long-term impact. The Ares Philanthropy team’s initial efforts to refine and articulate the Ares Foundation’s strategy led to a closer examination of the firm’s Global Philanthropy and the creation of an evaluation framework to help more deeply understand the outputs, outcomes, and impact of this body of work. As a result, the team is not only able to rigorously analyze their current philanthropic efforts, but also equipped to leverage those learnings to inform the firm’s philanthropic practice over the long-term.
Having defined the overall strategy for their work also allows the Ares Philanthropy team to identify and communicate more pathways for employee engagement firm wide. The team is better positioned to communicate the ways in which Ares creates and facilitates opportunities for employees to participate in social impact initiatives, including how team members help set and advise the Global Philanthropy strategy. Doing so is intended to help increase employees’ buy-in with the firm’s philanthropic efforts and build their personal capacity for giving back to the communities where they live and work.
FSG’s efforts to center the firm’s Global Philanthropy around a single strategy have helped the Ares Philanthropy team identify the ways in which all their activities can help demonstrate Ares’ core values—collaborative, responsible, entrepreneurial, self-aware, and trustworthy—in action. Furthermore, the team will be able to assess how these Global Philanthropy efforts help support the firm’s “Impact at Ares” goals, which seek to help ensure an inclusive and equitable economy as well as a just transition to a lower-carbon economy.
In addition, the Ares Philanthropy team’s dedication to ensure robust impact measurement will support storytelling about the changes that result when the firm and its team members give back the communities where Ares does business. The power of that messaging is what the team hopes not only inspires employees to continue to engage in social good, but also incentivizes Ares’ portfolio companies and industry peers to think about their own charitable activities and the difference that they can help make possible.
“We started this journey with FSG with the idea that knowing how our grantmaking affects people’s quality of life would help us identify if we were charting the right course to make the difference that we set out to achieve,” said Michelle Armstrong, head of philanthropy and executive director of the Ares Foundation. “The path that we ultimately took helped us establish a comprehensive roadmap for our entire philanthropic portfolio so that we now view it as a collection of harmonious programs that can help us drive toward our desired impact. What truly excites us, though, is knowing that Ares team members played an integral role in shaping our Global Philanthropy framework and see the value in what we are trying to accomplish and are willing to be our learning partners as our work continues to evolve.”
[1] The Ares Foundation expects to contribute up to $25 million over five years. The actual amount contributed may be less than this amount.
[2] The Ares Foundation expects to contribute up to $30 million over 10 years. The actual amount contributed may be less than this amount.
[3] The Ares Foundation expects to contribute up to $1 million over five years. The actual amount contributed may be less than this amount.
About Ares Management Corporation
Ares Management Corporation is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of December 31, 2022, Ares Management Corporation’s global platform had approximately $352 billion of assets under management, with over 2,500 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.
About Ares Charitable Foundation
The Ares Charitable Foundation (the “Ares Foundation”) is a 501(c)(3) qualifying organization sponsored by Ares Management Corporation (“Ares”), a leading global alternative investment manager. Established in 2020, the Ares Foundation seeks to accelerate equality of economic opportunity through grants to nonprofit organizations whose programming provides Career Preparation & Reskilling, encourages Entrepreneurship and deepens individuals’ understanding of Personal Finance. The Ares Foundation’s vision – a world in which all people benefit from equitable access to knowledge, resources and opportunities so that they can achieve their full potential – reflects Ares’ core values and staunch commitment to philanthropy. For more information, please visit www.aresfoundation.org.
