Marguerite Casey Foundation’s (MCF) board of directors signed off on an ambitious investment policy statement (IPS) four years ago, which aims to bring 100 percent of our financial resources into lockstep with our vision for a better world. We know the portion of our endowment (5.5 percent) that funds our grantmaking creates a huge impact through our grant recipients. We wanted to see what would be possible if we scaled that impact by aligning the remaining 94.5 percent of our endowment with our core grantmaking work, which is focused on building power in communities that have long been denied access to it.

Two years later, MCF brought our endowment above the billion-dollar mark for the first time in the foundation’s more than 20-year history and we continue to see our values-aligned investing beating industry benchmarks while activating the full weight of our endowment to advance our vision.

MCF uses four pillars to guide our values-aligned investing, which we share so that other funders may replicate this success and help us build momentum in the philanthropic sector to change how we, as a sector, manage our capital.

Pillar 1: Invest in Diverse Asset Managers

At MCF, we screen asset management firms to ensure that a minimum of 51 percent of the firm is owned, controlled, and/or operated by Black, Indigenous, or managers of color, or by women managers. This percentage reflects the power dynamic we want to see in firms managing our endowment, and it aims to address who is making decisions and benefiting from the economics of the firm.

Pillar 2: Sharpen Your Investment Screening for the Long Term

Core to MCF’s investment policy is a longstanding holistic due diligence screening process for any entity we invest in.

Investors in our sector typically consider traditional investment metrics and include environmental, governance, and social factors. For us, this means asking questions such as:

  • Is the entity implicated in the climate crisis?
  • Does the entity have a diverse board?
  • Is the entity honoring the sacrifices made by its employees?
  • Is it addressing the racial and gender pay gap?

These questions are critical to our job as fiduciaries and help us screen investments according to a risk framework that incorporates long-term considerations as well as our organizational values and vision.

Pillar 3: Shareholder Advocacy

When we do find companies in our portfolio that make decisions that go against our values, MCF uses our status as shareholders to engage directly with companies and related asset managers, urging them to improve their products and services or modify practices that may cause harm to the communities we serve.

Pillar 4: Use Impact Investing for a Just Economy

MCF uses economic impact grants to ensure our endowment invests in projects that are increasing wealth for communities that have long been denied wealth-building opportunities. Our economic impact grants aim to drive as much capital as possible to entrepreneurs of color and to the communities we serve through new economic models that empower workers.

Read the full article about values-aligned investing by Daniel Gould at the National Center for Family Philanthropy.