A Conversation with Ares Charitable Foundation’s Michelle Armstrong

What’s it like to create a corporate foundation from scratch? That was the question Michelle Armstrong faced in 2021, when she was hired to be managing director, head of philanthropy and executive director of the Ares Charitable Foundation, the then-incipient philanthropic arm of the alternative finance firm Ares Management Corporation. At the time, it was just an idea; Armstrong was tasked with bringing it to fruition.

We touched on the charitable giving of one of Ares Management Corporation’s founders, Antony Ressler, back in 2019, while looking at the booming new Wall Street sub-category of private credit. Since then, this aspect of the alternative finance world has continued to grow, the company has become even richer, and its leaders, I suppose, have been better positioned to give back, as I wrote in a larger profile of Ares Charitable Foundation.

Armstrong came to her role of foundation creator after nearly nine years as a manager of partner engagement at the Project Management Institute. Prior to that, she worked as a consultant and held leadership positions at Goldman Sachs Foundation and MetLife Foundation. She also worked on the other side of social change, evaluating the success of philanthropy-funded initiatives at NCREST, part of Teachers College, Columbia University, and working in the nonprofit world.

In her role at Ares, Armstrong has had access to abundant cash, highly motivated corporate leaders with philanthropic experience, and a general mandate to address economic mobility. But she had to create a strategy and identify grantees. I spoke to Armstrong to learn more about her role and process.

So why did the company decide to start a foundation in 2021?

There has been this longstanding tradition at the firm to try to make a difference in the areas where we do business. Historically, we do that with our employment engagement program, called Ares in Motion or AIM — going out, doing community service in local areas, making sure you are connected to the people who reside in those communities by supporting the nonprofits in them and connecting them to those organizations. There was a desire to go deeper and have a more lasting impact.

What did the process of launching an entire company-wide philanthropic arm look like? You started without a strategy or grantees or infrastructure in place. That sounds like it could be overwhelming.

I was a team of one for about 10 months. I wanted to figure out what we needed to hire for, and I needed time to think. The foundation board had some ideas about what they wanted to do, but they wanted more time to think strategically about how to execute against their thinking. I spent the first month or two trying to develop the logic model and theory of change and KPIs [key performance indicators] and having conversations with key stakeholders across the firm to get their buy-in and perspective. I needed that grounding framework from which to build out.

Now, the philanthropy team as a whole is five people. Four of us are in New York and we have one colleague in Denver. We’re in the office, but so much of our work is public-facing that we are out a lot in the field, particularly as these partnerships blossom.

We talked before about the foundation’s approach of tying philanthropic dollars to investment performance. How did this come about as a philanthropic strategy?

In our alternative credit team, co-heads Keith Ashton and Joel Holsinger lead Pathfinder, which is a fund. They had already made a staunch commitment to pledge a portion of their earnings to charity. The firm thought that was a good model to adopt to stand up the foundation — investment performance being tied to the charitable aspects. The better you do on your investment performance, the higher your returns will be, and you’re pledging a portion of that, so the more you can do for charitable causes. That seemed like a great framework we should build on.

How did you wind up working in the foundation world?

In a kind of roundabout way. I thought I wanted to go into financial services because everyone in my college was doing that. I did that for about a year and realized it was not for me. I went to work for a youth-serving nonprofit that was looking at helping first-generation college students develop the skills necessary to be successful in college — not just the academic piece but the whole person, soft-skilling. I was a program director of that for a couple years before I went to graduate school at Teachers College, Columbia University, and started working at a research center called NCREST, the National Center for Restructuring Education, Schools and Teaching.

At NCREST, I was exposed to the organizations funding these projects we were trying to evaluate. The funding was tied to having an external evaluator. We were often hired to be the evaluator of projects being funded by College Board or Kellogg Foundation.

Then I wanted to be able to marry my background as a nonprofit program director with my understanding of what makes for a good, viable program. Where those two worlds met was being a grantmaker. You have to be able to look at the work through multiple lenses and to have empathy for the nonprofit and an understanding of what would be a viable initiative. It was like a perfect marriage. I applied for a job to be the education program officer at MetLife Foundation and then got recruited to go to Goldman Sachs at their foundation.

How does this “perfect marriage” between nonprofit work and evaluation play out in your current role running Ares Foundation?

The idea of trying to listen to people and take into consideration what is and isn’t working — that is the same approach I take in my role. We do that across the board with grantees and employees. That is why we spend so much time with organizations, thinking through what they could do. We brainstorm together. We’re thinking through the risk and mitigation strategies together. We co-design pretty much every grant with the organization so that the relationship starts at the outset, and they feel comfortable being transparent. We’re trying to respect them and their expertise, but also be attentive to our funding goals. We never take a top-down approach. We walk side by side, not five steps ahead. And I still play program officer for our Asia region.

I know Ares still has the employee engagement program that you mentioned, AIM. How does this approach of listening to grantees and walking “side by side” impact or influence your interactions with employees of Ares and AIM?

We just released a white paper about employee engagement. We spent about 10 months surveying over 5,000 people in 10 countries about the skills they get when they participate in employer-sponsored volunteerism. We are using that data for our own employees, and we want to share findings with others.

We’re really listening to them from the big picture to the small, from where we want to dedicate our time, talent and energy to even the most simple thing. We got some feedback from employee volunteers that said, “Your T-shirts are too hot.” So we listened to that, and we’re going to get mesh t-shirts next summer. We want employees to have choice and voice.

What do you like about working in philanthropy?

The creativity of it. Our team works very, very hard, sometimes very late hours, due to deadlines or needing to talk to organizations around the globe. I love it because it allows us the flexibility to be creative in our work. I have to give credit to leadership at Ares, particularly Mike Arougheti. We can think about the “what ifs.” But you have to be in an environment like an Ares where one of the core values is being entrepreneurial. We never feel boxed in or like there’s a ceiling on how we give back and engage.

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