Giving Compass' Take:

• Philanthropic institutions can pursue investments and design missions that are effectively serving their community needs. 

• How are you ensuring your investments are impactful? 

• Read about the growing returns of impact investments.

It’s widely accepted that institutional philanthropy can achieve more by throwing the whole of its weight behind its mission. This special feature examines some of the ways and means in which foundations are doing so.

Globally, the latest statistics suggest that philanthropy donates around $58 billion per annum and copious studies outline the many causes and issues we give to. In contrast, according to Paula Johnson’s estimate in her 2018 Global Philanthropy Report, our assets are estimated to be about $1.5 trillion, but unlike our grants programmes, there is relatively little information about what is clearly the largest element of our sector’s resources; they remain opaque, even to us.

Yet, these hidden assets – buried deep in capital markets – are arguably some of our most powerful tools for combating injustice, environmental degradation, poverty or any of the myriad issues which concern us. Indeed, I have called them our ‘superpower’: as endowed foundations, we have deep knowledge of the many challenges facing our societies and our countries as well as being important economic actors, controlling billions invested in capital markets all over the globe. Yet many of us ignore this power, focusing our attention only on the 5 percent or less of our assets visibly at work. What we hope to do in this special issue is bring the other 95 per cent of foundation assets out of the shadows and into the spotlight. We also hope to show that all over the world trusts and foundations are actively using their investible assets to have definite impacts on the world.

As funders, we are used to designing and implementing grant programmes to deliver certain outcomes. The skills involved in making this support timely and effective are essentially shaping money to most effectively address the issues.

Mission or high-impact social investing is a further journey down this path, as many funders have found that grant money wasn’t quite the right ‘shape’ to provide what was needed. High impact investment may underpin interventions through equity, it can provide early-stage loan finance to build track records in revenue-generating solutions, or use guarantees to de-risk new social ventures with the potential to scale.

Read the full article about investments by Danielle Walker Palmour at Alliance Magazine.