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A foundation is a powerful platform through which families can express their values in society. Yet, most families only use a small portion of their foundation assets to pursue their philanthropic missions. Funding solutions to the world's toughest challenges require far more resources than are available through foundations' grantmaking alone. As families grapple with the scale of these challenges, many are seeking ways to activate more of their philanthropic assets towards their missions. Impact investing is a powerful tool for maximizing a foundation's assets for good. This primer is a guide for families looking to align and activate their foundation's assets to achieve their social and environmental objectives while meeting their foundation's financial needs.
Families typically establish foundations to address the challenges in society about
which they care about most.
1. Foundations are already doing it, and it’s working. A significant proportion of family foundations is making impact investments out of their endowments as well as PRIs.
2. The right team is necessary. Creating and implementing a mission aligned
investment strategy requires a professional team that is dedicated to a foundation’s, or family’s, commitment to impact. That team must also have professional experience that will provide for informed, strategic decision-making processes in order to invest for impact while keeping the constraints and limitations of a family foundation.
3. Start with what you are already doing. Making investments using foundation dollars that align with or advance the mission of the organization is a new frontier for many families. Those who have done it recommend starting from a place of expertise.
The foundations of the future can be 100 percent mission conscious in how they deploy their capital: to avoid contradiction with their philanthropic vision, to align with their values, and to activate investments, which have a multiplier an effect for their programmatic goals.
Family members and trustees of foundations have a powerful opportunity to look across the entire portfolio of the foundation and pull each of the levers available to create the change they seek to make in the world.