As a second generation family member, former entrepreneur, and the professional head of our family’s philanthropic umbrella, I oversee both our established portfolio of grants as well as our growing portfolio of impact investments. We have had enough success with our impact investments that I can identify three factors that have contributed to their positive performance:
- We have limited our impact portfolio to mission-related investments (MRIs) that are carved-out of the corpus of one of our foundations;
- We have sought to achieve risk-adjusted market-rate returns; and
- We have tried to ensure the same or greater social impact than would have been achieved had the funds been paid out as straight grants.
Instead of aligning all of our foundation’s investments with our mission, we have carved out a small portion of the corpus of one of the foundations under the EJF Philanthropies umbrella. By setting aside this portion, we have not had to put a large amount of money to work. Instead, we have been able to look for small investment opportunities that provide additionality in terms of social impact, whereby the social impact would not have happened had our impact investment not been made.
Read the full article on impact investing by Simone Friedman.
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