Chronicle Reports on Nathan Cummings Foundation's 100% Commitment
Alex Daniels of the Chronicle of Philanthropy reports on Nathan Cummings Foundation's historic move to commit 100% to mission-aligned investing. See excerpts below of comments from, and click here for the complete article.
"The Nathan Cummings Foundation announced Tuesday it plans to place all of its nearly half-billion-dollar endowment solely in investments that aim to reduce social inequality and mitigate climate change, making it the largest foundation to try to use its entire investment portfolio to generate social change.""Ruth Cummings — chair of the foundation’s Board of Trustees — said other board members in her generation have long been interested in impact investing, but attempts to move more swiftly into the practice were nixed by the grant maker’s investment committee. Now, with a fourth generation of Cummings offspring also sitting on the board, the idea has gained traction. 'Times have changed, and the world has changed," she said. "Our mix of trustees at this time understands what’s at stake in the world.'"
Examples
"The only other major foundation that has dedicated all of its assets to its mission is the F.B. Heron Foundation. Cummings is almost twice the size of Heron, which completed the task of merging its grant-making and investment strategies in 2016. Cummings has not announced changes in its grant making and is using environmental and social criteria to 'screen' its investments rather than designing an overarching strategy that combines investments with its grant programs.""After Heron made the switch, the Ford Foundation followed up in April when it pledged to similarly dispatch $1 billion of its endowment, which hovers around $12 billion.""Others, like the McKnight Foundation and the Rockefeller Brothers Fund, have made similar commitments. As part of a broader $350 million impact-investing plan, the Kresge Foundation in 2015 earmarked $50 million for social and environmental investments. The remainder of Kresge’s assets earmarked for impact investing are going to program-related investments, which count toward a foundation’s legal requirement to distribute at least 5 percent of its assets to charitable causes each year."
Community Funds
"The hundreds of millions of dollars that large foundations have pledged to social and environmental investments provide a model to foundations of all sizes that mission investing is a tenable approach to philanthropy, said Matt Onek, president of the Mission Investors Exchange, a membership organization of foundation and investment professionals.
"'A lot of community foundations that were dipping their toes in are now making more solid commitments,'" he said.
"Regional grant makers that have started making mission investments include the Baltimore Community Foundation, the Incourage Community Foundation, and the New Hampshire Charitable Foundation. ""In 2015, the Internal Revenue Service signaled that mission-related investments don’t necessarily jeopardize a grant maker’s long-term viability and that such investments would be considered within legal bounds. 'The guidance removed a hurdle, whether it was real or perceived," Onek said. "It certainly helped make it easier for folks.'"
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