The barriers facing foundation leaders who want to invest endowment assets in line with their mission are familiar. Trustees and investment advisors often view impact investing as less financially prudent, while grantmaking teams are often unfamiliar with impact investing terminology and feel ill-equipped to assess trade-offs between a grant, a traditional investment, or an impact investment. These hurdles have been compounded by broader concerns of impact washing (or scepticism about the impact claims made by managers).

But since the term ‘impact investing’ was coined in 2008, the market has matured considerably and has built key infrastructure to address these objections.

Today, the impact investing world—and transparent—is more accessible than you may think.

Standards have emerged, benchmarks have been developed, and a growing cadre of asset managers and asset owners – including many foundations – have successfully built portfolios that have delivered measurable impact. 

This maturity means that foundations newer to impact investing have more resources than ever before to draw from as they get started on their impact investing journey. Playbooks now exist to build internal consensus around making an endowment more mission-aligned (for example, IEN Roadmap). Guidance exists both for how to invest for impact across different asset classes (examples include Impact investing in fixed income and GIIN guidance on listed equities) and how to weigh the trade-offs across philanthropic tools (such as IFI tool). 

Once a foundation settles on its overarching approach or commitment, there are also practical tools to help evaluate how well different products fit its mandate, vet the credibility of an impact manager, and efficiently monitor impact performance. At BlueMark, our mission is to help the market more efficiently and effectively interpret a product’s impact credentials and results— giving asset owners an objective take (and catching potential blind spots) as they weigh different investment options.

Read the full article about impact investing best practices by Sarah Gelfand and Jack Isaacs at Alliance Magazine.