In September, Bridgeway Capital Management shelled out $5.1 million to settle a Securities and Exchange Commission complaint that the firm had overcharged customers for several years. President John Montgomery apologized to fund shareholders for the misstep and pledged to reimburse them, with interest.
The settlement won’t keep Montgomery from holding up his end of the challenge he issued to his peers at a July investment conference in Chicago: Give more to charity. Houston-based Bridgeway planned to donate half its 2004 profits to worthy causes and to match employees’ individual donations of up to $1,000 -- policies it has followed since its 1993 inception. In 2003 the firm’s giving totaled $2 million.
“While most businesses couldn’t do 50 percent, a lot of businesses could do 10 percent, and almost all could do 1 percent,” says Montgomery, an evangelical Christian who built charitable giving into his business plan when he founded Bridgeway.
This year the firm’s philanthropy will likely focus on human rights and community groups, both in Houston and as far away as the Caribbean and Africa. Among the groups that have caught Bridgeway’s eye: Design that Matters, a Massachusetts collective of engineering and business students affiliated with Montgomery’s alma mater, MIT, who are working to solve design problems in developing communities; the Fifth Ward Enrichment Program, a community center in Houston; and the Bethlehem Ministry, an Episcopalian charity building schools in Haiti.
A few young businesspeople interested in Montgomery’s focus on charity have sought him out, but his peers in money management haven’t exactly rushed to announce that they’ll be following his lead. If he’s discouraged, however, the 49-year-old quantitative manager isn’t letting it show. “Our impact’s not huge yet, but we’re still young,” he says.
