Tools & Resources

Learning from Peers: A Collection Of Impact Investing Strategies

What tools might help achieve your organization’s mission — beyond grants? And, vice versa, how can the full range of financial tools you’re currently using come into greater alignment with your organization’s values? Below are examples of foundations that have dedicated time and resources to developing comprehensive impact investing strategies and sharing their lessons with the field. Check out the 101 Library for a growing set of resources for foundations news to impact investing.
 

Heron

Investment Policy
Heron Foundation comprehensively lays out its approach to impact investing and the journey to achieving 100% mission alignment across all their assets. In addition to detailing their portfolio construction, their website combines investments and grants into a single model, available on their website.
 

McKnight Foundation

Investment Policy, Frequently Asked Questions
The McKnight Foundation has an integrated strategy for PRIs and MRIs and includes an overall commitment of values aligned investment from the endowment that exceeds 10%. They have also invested over $50 million in PRIs.
 

Surdna Foundation

Mapping the Journey to Impact investing
Last year, the Surdna Foundation announced that it would earmark $100 million to impact investing. Coinciding with their announcement, they published a report titled Mapping the Journey to Impact Investing, which lays out its experience and provides a “road atlas” to help others engage in impact investing. See the documents section of this page for the full report.
 

Mary Reynolds Babcock Foundation

Investment PolicyPRI Policy, and ESG Guidelines
The Foundation's impact investments include market-rate investments from the endowment and below-market-rate program-related investments (PRIs). Their PRIs directly support our mission in the South, while market-rate investments meet the standards determined by their Investment Policy, which includes environmental, social and governance factors. MRBF's investment policy establishes a goal of spend 5.5 % of a 12-quarter moving average of the market value of the endowment, exceeding the required 5% distribution.
 

Northwest Area Foundation

Impact Evaluation
NWAF’s impact investing strategy is unique in that all of its impact investments come from the endowment. From this pool, 10% of the total endowment, NWAF deploys both below-market and at-market-rate impact investments.
 
NWAF defines Program-Related Investments (PRI) and Mission-Related Investments (MRI) differently from their peers. PRI is a term of art used to define investments that prioritize impact over return and are counted towards the minimum 5% distribution of assets that a foundation must put towards philanthropic goals. MRIs are impact investments made with the remaining 95% of endowment assets; legally, there is no requirement that endowment assets be invested with impact considerations in mind. 
 
NWAF's distribution of 5% towards philanthropic goals is solely dedicated to grants. They define the below-market investments they make from their endowment (a total of $10 million as of 2018) as 'PRIs' and their market-rate impact investments (a total of $30 million as of 2018) as MRIs. They have also have measured the impact of their investments for over 10 years and actively search for investment managers whose values align with their own, including rural community investment and funding opportunities not ordinarily considered for mission investing.
 

Rockefeller Brothers Fund

Investment Policy, Divestment Statement, Proxy Voting
RBF has set a portfolio allocation target of 20% for impact investments. The Fund’s priorities for investments from this 20% pool are focused on opportunities that align with the Fund’s grantmaking programs, including those targeted at clean energy development. In 2014, the Fund committed to a two-step process to divest from fossil fuels companies. The immediate focus was on coal and tar sands, two of the most intensive sources of carbon emissions. 
 

Incourage Community Foundation

Investment Policy
Incourage began local investing almost a decade ago with insured deposits in local banks and credit unions. They then allocated a portion of fixed-income portfolio to regional high-performing Community Development Financial Institutions (CDFIs) that provide financing to local affordable housing, health and human service organizations as well as businesses. Next, Incourage acquired their downtown’s underutilized Tribune building, which will be the site for a regional accelerator to fuel local entrepreneurialism. They are also allocating alternative investments to private equity holdings that promote the long-term ownership of
local companies in local hands, particularly among experienced women entrepreneurs and entrepreneurs of color.
 

InFaith Community Foundation

Investment Policy (Members Only Resource)
InFaith Community Foundation's activities include the WomenInvest inFaith Portfolio, which invests in companies that do well when women do well. The portfolio invests in economic opportunity, access to education, affordable housing and other opportunities that promote the overall well-being of women within their community.
 

World Resources Institute

Although not a foundation, WRI demonstrates the ways in which endowed organizations are also exploring mission alignment. In 2014 the World Resources Institute Board of Directors committed to aligning their investments with their vision for a sustainable future. As of summer 2018, they have aligned the bulk of their portfolio with mission, having transitioned 70.9% of their assets to ESG integrated investments. Read about their journey here.

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