125 Years of Transformation

Philanthropy and Corporate Social Responsibility are getting more sophisticated. Donors and grantees spend ample time developing metrics and analysis to help determine if programs are successful in achieving the expected outcomes.

The key to measuring impact is to do this in partnership – to have a dialogue between donor and grantee about the goals of the program and how measurement is done. To that end, Alcoa Foundation will continue to strive for progress by asking ourselves:

  • Where we can have the most impact, leveraging not only Foundation dollars but also the knowledge of our employees?
  • How can we best quantify and report the impacts of our environmental and education programs?
  • Are we able to increase the impact of our investments and programs year over year?

Similar to the previous year, the outcomes we will track in 2014 include:

  • Reduce emissions and the use of natural resources
  • Develop and set standards around lifecycle and GHG emissions measurement
  • Promote environmental awareness and create environmental community ambassadors
  • Increase aluminum recycling, moving towards the aluminum industry’s goal of 75% by 2015
  • Replenish the land, primarily through effective tree planting
  • Develop solutions that make mass transportation and buildings more sustainable

  • Develop and partner on promoting science, technology, engineering and math (STEM) education
  • Prepare college students and young professionals to improve their skills or pursue a career in Environment, Health and Safety
  • Provide education and training opportunities to gain employment in engineering and manufacturing
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A letter from our president

Elsa Ozer, President of Alcoa Foundation

In 2013, Alcoa celebrated its 125th anniversary – a noteworthy milestone by any measure. For Alcoa, the year was marked by a decided transformation from a commodity company to one that is focused on growth businesses, innovation and value-creating technologies.

“We are well-prepared and fully committed to achieve the Alcoa vision – “Advancing each generation” – for our shareholders, customers, employees, communities and partners.”
Alcoa Chairman and CEO Klaus Kleinfeld, 2013 Letter to Shareholders

The idea of a “transformation” really resonates with us at Alcoa Foundation. We are as energized by that dynamism in the business as we are by the notion that our CSR work can bring new life to the natural environment; or that an underperforming student can ignite a passion for science and technology; or that an unemployed individual can acquire critical technical skills, find rewarding work and secure his or her economic future. During times of transformation, we think and do things differently, and we take our future into our own hands.

In that spirit, and in recognition of Alcoa’s milestone anniversary last year, our Foundation partnered with dozens of high-impact non-profit organizations to enable positive, community-oriented change in dozens of countries worldwide. A major part of that transformation was spurred by Alcoa employees, who donated more than 850,000 service hours in 2013. During our annual Month of Service alone, we saw a record 62% of Alcoa employees give their time and energy in more than 1,300 community-based events that lent a helping hand to more than a half million people.

You will read in this report about just a few of the hundreds of transformative programs that Alcoa Foundation, together with our nonprofit partners, initiated last year. We launched one in particular to commemorate Alcoa’s 125th anniversary and help prepare young people around the world for rewarding and stable careers in the manufacturing and technical fields. Our “Advancing Each Generation 125th Anniversary Internships,” developed in partnership with non-profit organizations in eight countries, will place more than 500 unemployed young people in manufacturing and technical internships. That pathway from unemployment to a viable and attractive career is one that Alcoa Foundation is immensely proud to help bring to life.

As the newly named Alcoa Foundation President, I have shared in that pride and gratitude to our non-profit partners and the 60,000 Alcoa employees who help strengthen our communities and transform lives every day. With an eye to 2014 and beyond, I know that our combined efforts will lend resilience and positively impact our communities, helping them grow and thrive for the next 125 years.

Esra Ozer
President, Alcoa Foundation

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In 2013, Alcoa Foundation was honored to be recognized for our work
and corporate citizenship across the globe.

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Endowment Investing Strategy

Alcoa Foundation’s assets are considered to be a perpetual pool of capital. The objective of the investment strategy is to preserve the real (inflation adjusted) value of the assets to maintain the real value of its program spending over the long term to support the goal of contributing 5 percent of the value of its assets each year. The Alcoa Foundation’s assets were $468 million at year-end 2013.

The portfolio's investment strategy has been revised to reduce and diversify the investment risk taken to achieve our long-term objective via increasing both asset class and risk factor diversification. The strategy revisions are expected to increase the probability of achieving our long-term investment objectives while reducing the risk of experiencing large short term portfolio draw downs. Specifically, we meaningfully reduced the allocation to public equities and increased the allocation to macro and equity long/short hedge fund strategies, US inflation protected securities and long duration US Treasury securities.

The revised investment strategy helped us to generate a solid 2013 investment return of 7.1% which outperformed our passive performance benchmark by 1.2% and our 5% real return objective. Through 2013, Alcoa Foundation's investment returns outperformed its passive investing benchmarks for all time periods (1, 3, 5 and 10 years).

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