We are seeing more family foundations committing their assets (both endowment and “payout”) to impact investing, regardless of asset size. The reasons are multiple and depend on the family, but we are starting to notice some trends.
First, we find that multi-generation families are being increasingly influenced by Millennials who are now working and are actively investing adults – who wish to align their endowment with their values.
The second trend we notice is that asset owners are sharing best practices more and more – through NCFP, through Confluence, Toniic, Mission Investors Exchangeand other networks. Talking about your portfolio in public is no longer a taboo – and families already doing impact investing are readily sharing their experiences with other families. In some cases, like with KL Felicitas Foundation (a family foundation), the portfolios are completely shared publicly online and that has encouraged other foundations to do the same. These foundations are showing that it is completely feasible to avoid the “cognitive dissonance” that occurs when a foundation attempts to further its mission with only 5% of its assets and does not “activate” the lion share 95%.
A third and very important factor is that investment advisors and fund managers have more sustainable and values-aligned investment products to offer their clients – which are not concessionary. Fiduciaries and trustees of these foundations have realized that an endowment can be mission aligned without having to necessarilygive up on your financial goals, including if your goal is growth in perpetuity.
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