The Barra Foundation's First Mission-Related Investment
We spoke with Tina Wahl, the president of The Barra Foundation, a Mission Investors Exchange member, about their journey to making their first—and likely not last—mission-related investment (MRI). Based in Greater Philadelphia, The Barra Foundation invests in innovation to inspire change that strengthens the local community. It has an $89 million endowment and three full-time program staff. Here Tina explains how our Mission Investing Institute gave her the practical tools that led to making this initial MRI.
MIE: How did you decide it was time to begin mission investing?
TW: I had been thinking about this for some time. One particular colleague—Laura Kind McKenna from The Patricia Kind Family Foundation (a sustaining member of Mission Investors Exchange)—really pushed me to think about how to deepen our reach and impact in the community beyond our 5%. I started to hear and read more about it, and then I attended MIE’s Mission Investing Institute in Chicago in 2015.
The Institute equipped me with lots of tools to be able to communicate this idea with my board. Importantly, it gave me language to explain mission-aligned investments. Many of us running foundations don’t have a background in investing. In my case, the board has better investing experience than I do. But I left the Institute with a new confidence to be able to talk about these concepts.
When I came home I ran a session with my board on the basics of PRIs [program-related investments] and MRIs [mission-related investments] and what’s happening in the field. I even recycled a number of slides from the Institute!
MIE: How did you get the board from idea to action?
TW: The Mission Investing Institute challenged us to think about what concrete steps we could take to get started. One way was to work with CDFIs [community development finance institutions]. Another was to explore making low-interest loans to social enterprises. Those were the two gateways for getting your board involved and dipping your toe in the water.
We have a terrific CDFI in Philadelphia, the Reinvestment Fund, and we asked them to help us educate the board. We held a board meeting at their offices with a full agenda to show examples of impact investing. There was a presentation from Common Market, a nonprofit regional food distributor to low-income markets that could share its PRI experience. And former Bill and Melinda Gates Foundation CFO Dick Henriques joined us. He’s now a Senior Fellow at the Center for High Impact Philanthropy at the University of Pennsylvania, translating his experience to small foundations.
Hearing directly from practitioners really affected the board. As one board member with deep financial experience said, “It got real, very fast.” The Reinvestment Fund’s loan fund seemed like a smart next step. It helped that the Reinvestment Fund has been around 30 years and never defaulted on a payment. As a follow-up, Barra’s board chair, investment committee chair and I met with Reinvestment Fund staff for a direct conversation—not Tina translating! We also talked with our investment advisors and our Investment Committee Chair looked at the prospectus. We were ready to commit.
MIE: What exactly is the investment?
TW: We decided to take $1,000,000 from a fixed income fund out of our endowment and put it into a loan fund with the Reinvestment Fund. The board felt confident about achieving both social impact and financial return, with a three-year term at 1.25%.
MIE: How did your peers’ experience inform your decision?
The biggest influence here in Philadelphia has been Laura McKenna whom I mentioned earlier. The Patricia Kind Family Foundation had already invested in the Reinvestment Fund and was frustrated others hadn’t jumped into impact investing too.
MIE: Does The Barra Foundation have an appetite for doing more mission-related investing?
TW: What was interesting after that first MRI is how some board members said this was the right thing to do—it was about the social impact. It’s new, it takes time so we continue to have the conversation and have touched on mission-aligned investing at every board meeting since that initial conversation. We actually just made a PRI in New Day Chester in September to help revive its arts district.
Now we are evolving to ask ourselves—can we know what we own? That’s a great next step for foundations to talk about. Before we decide about our next mission-related investment let’s dig deeper into our portfolio to see where we have invested already. If deals come we’re willing to take a look at them and hopefully that will evolve into a more proactive strategy.