In 2012, we established the Richard W. Goldman Family Foundation in honor of our late father. The foundation promotes equality and reduces barriers to opportunity for our nation’s most marginalized families. It does this by increasing access to education, health and financial resources during early childhood.

We were enthusiastic when we started exploring impact investing in 2016, but we didn’t know how to proceed. The foundation had a well-established grant portfolio of organizations that supported young children and families from underserved communities. Yet, as we considered how to maximize the social impact and reach of our $75 million endowment, we kept circling back to the enormous potential of impact investing.

Over the past five years, our foundation has matured into its role as an impact investor. As our peers make consequential choices about where and how to invest for the greatest impact, we wanted to share lessons from our journey.

While our board continues to learn and refine our strategy, we have gained four critical insights that guide our decision-making and actions.

Lesson #1: Know your capacity and bring in impact investing expertise when needed

When we first explored impact investing, we knew we’d need external expertise. Our three board members, though deeply engaged in the foundation’s grant-making strategy, are not investment professionals. Therefore, we looked to our partner, Arabella Advisors, to design an impact investment strategy that built on our existing grant-making portfolio.

Lesson #2: Streamline decision-making

Launch an impact investing strategy requires making a lot of small decisions. Our board typically meets once per quarter and makes decisions by consensus. We needed a more responsive and streamlined process. Thus, we designated one board member as the impact investing champion. They worked with the Arabella team to draft the foundation’s impact investing strategy.

Lesson #3: Focus first, then expand your investments over time

At first, we wanted our impact investments to mirror our grant-making strategy. It focuses on health, education, and economic supports for families and young children. However, it was easier to concentrate on a narrower impact target while building our initial portfolio. We chose early childhood education.

Lesson #4: Impact investing can respond nimbly to immediate and urgent needs

In 2020, COVID-19 forced a massive shift in early childhood care and education. Our foundation offered emergency funding and relaxed reporting requirements, immediately.

Read the full article about launching an impact investing portfolio by the Richard W. Goldman Family Foundation Board of Directors and Cyrus Kharas at Exponent Philanthropy.