You’ve seen the research:  financial returns need not be sacrificed for environmental or social objectives. You recognize the possible benefit of using your foundation’s investment capital to ameliorate the same pressing social and environmental issues currently targeted by your grant strategy. You hear people in the mainstream financial services industry throwing around the term “impact investing,” but wonder how it might apply to your own foundation’s investment portfolio.

We know you are asking these questions because we hear them every day from our members, philanthropists interested in mission-related investing. As a non-profit membership organization with the sole purpose of helping asset owners align their investment strategy with their environmental or social mission, we know that it can be a huge and often daunting decision to apply social and environmental criteria to an investment portfolio.

As you begin to read about mission-related investing (also known as impact investing; I use the terms interchangeably), you may be confronted with unfamiliar terms: ESG, shareholder resolutions, shareholder engagement, socially responsible investing (SRI), as well as questions such as:

  • How would we apply an impact investment strategy to the public equity holdings in our portfolio?
  • Are there other foundations our size that have also embraced an impact strategy?
  • The older family members on our family’s foundation board are skeptical of tying investment decisions to anything other than financial return and are very risk adverse.  How can we embrace a gradual impact investment strategy so we can convince them over time that there is no additional risk?

Read the full article about impact investing by Kate Simpson at the National Center for Family Philanthropy.