A Doctor’s Scientific Approach to a Grant Maker’s Investments

January 08, 2019

Chronicle of Philanthropy

By Marc Gunther 

In 23 years at the health-care provider Kaiser Permanente, Ruth Shaber worked as an obstetrician and gynecologist, served as the director of women’s health, and headed an internal institute on evidence-based medicine.

All of that came into play when in 2014 she started the Tara Health Foundation, a grant maker focused on the health and well-being of girls and women.

“Philanthropy is incredibly personal,” Shaber says. First as a doctor and now as a donor, “I love taking care of women.”

Shaber brought a scientist’s open mind to the question of how to organize Tara Health. After examining the evidence, she decided that both grants and investments should fully support the foundation’s mission.

“We’re 100 percent mission-aligned,” she says.

Tara Health is named for a Hindu (and later Buddhist) goddess embodying both fierceness and maternal protection for all beings. The foundation has an endowment of about $80 million, most from Shaber’s former husband, David Hung, a physician and Silicon Valley entrepreneur.

A Blank Slate

Shaber approached philanthropy as a blank slate. “I didn’t have a legacy or complex political dynamics to worry about,” she says. She attended an investment boot camp for women organized by Merrill Lynch and read Impact Investing: Transforming How We Make Money While Making a Difference, by Antony Bugg-Levine and Jed Emerson. She spent seven months as a fellow at the Gordon and Betty Moore Foundation and came away believing that philanthropy needs a radical revision.

“Ultimately, I believe that the traditional para­digm for how foundations drive social change should be turned upside down,” Shaber says. Most foundations say they drive change through their grant making and that the purpose of their endowments is to enable grants. That leads to thinking the maximization of returns from investments should be a top priority.

Instead, Tara Health uses all of the tools that it has — investments, grants, and hands-on support — to drive social change, Shaber says. So its grant making focuses primarily on women’s health, as might be expected, but also on research to improve results through impact investing. “That is going to unleash a huge amount of capital and really drive change in a way that we could never have dreamed of,” Shaber explained in a podcast on Knowledge@Wharton.

Tara Health has made grants to Wharton’s Center for High Impact Philanthropy; the shareholder advocacy group As You Sow; and Equileap, a nonprofit that studies gender equality in the workplace. All the programs aim to develop a playbook on how to use investing to drive social change. Tara Health has also served as an incubator for the Reproductive Health Investors Alliance, a network of foundations and investors who want to invest in ways that promote access to reproductive health care.

Approaches That Make a Difference

Tara Health’s investment portfolio is equally unorthodox. The foundation owns a small stake in Cadence Health, a start-up that hopes to develop an affordable birth-control pill that would be available over the counter. The foundation has made grants and loans to Jacaranda Health, a nonprofit that operates a hospital and maternity clinics in Kenya. Tara Health is also an investor in SHE, an exchange-traded fund managed by State Street Global Advisors that focuses on gender diversity in publicly traded companies.

“There are plenty of ways to make money with impact investing,” Shaber says. She even persuaded her financial advisers at Merrill Lynch to develop a custom portfolio for Tara made up of companies that advance women’s reproductive health.

One other advantage Tara Health enjoys over many well-established, endowed private foundations is that Shaber did not design it to last forever. “We’re a spend-down,” she says. “We’re here to take risks.”