When did the Surdna Foundation board first start discussing impact investing?

We made our first Program Related Investment in April 2014 but it was nearly 17 years ago that the board began to discuss what we now call impact investing. It was shortly after the sale of some forestry holdings that we invited in experts to talk with us about green investing and establishing investment screens based on companies’ social and environmental performance.

What became of those early impact investing conversations?

Many of the board members were just not ready to have these conversations. We had always maintained a traditional view that discussions about our program work and investments were separate—and unrelated. They occured in different committees. As grantmakers, we were actively pursuing our mission. And as investors of the endowment, the board felt its focus was on maximizing the funds available for grantmaking.

Tell us about any critical roadblocks?

To our Investment Committee, the incentives of incorporating social or environmental considerations—and the possibility of decreased financial returns—felt like a violation of their fiduciary responsibility. So the board’s reluctance was less about the availability of these sorts of investments or the markets, and more about the attitudes around the board table and among our investment advisors.

How did the composition of the board effect its consideration of impact investing?

As with many family philanthropies, personal differences unrelated to the issues at hand would often cloud discussions. Add to this the board’s embrace of consensus—the flip side of which was an utter aversion to conflict. And consensus usually meant that the strongest personalities would push others to take their point of view. So conversations about impact investing were often thwarted.

Read the full article on the Q&A with the Surdna Foundation by John Hawkins at the National Center for Family Philanthropy.