Inside Foundant – the Blog

Smart Business: Mission Investing and Real-World Foundations

Mission Investing Goals

Mission Investments are made by foundations and other mission-based organizations to further their philanthropic goals. Mission investments (like impact investments) include any type of investment that is intended and designed to generate both a measurable social or environmental benefit and a financial return.

~Mission Investors Exchange

Foundant Technologies recently created an informational piece titled Mission Investing: Real Stories from Small Foundations for Exponent Philanthropy’s resources page and we wanted to share it with you. Through the course of researching the topic of Mission Investing we were able to connect with several clients and learn how these truly valuable tools help them further their goals.

One of these clients, Kristen Cullen of the HRK Foundation, discussed how they use Mission-related Investments (MRIs) in particular:

Twenty percent of the HRK Foundation’s portfolio is invested in MRIs. There are a number of funds where MRIs can be invested and make a big difference, both in social and environmental impact and for the foundation itself. The HRK Foundation invests in several of these, including Equilibrium Capital, Generation, and KBI Water Strategy.

Investments in these types of funds allow the foundation to not only remain in perpetuity, but also know that their money is being used in a manner that will produce a measurable social or environmental benefit.

Also included under the umbrella term Mission Investing are Program-related Investments (PRIs), which are made on the grantmaking side of the organization. Mission Investors Exchange says that PRIs are primarily made to achieve programmatic goals rather than financial objectives. This tool allows foundations to make low rate loans for funding such things as affordable housing, art, community development, construction loans, bridge loans, and so on.

Amy Hyfield, of the O.P. and W.E. Edwards Foundation says:

Usually the organization approaches us and we start a conversation about their needs. If we can’t make a grant, we may offer a loan as an option. We want these organizations to be successful and we want to help them as much as possible to reach their goals, but we would like to recover the principal so that we can make further investments.

Of course, every foundation is different and will use these tools in different ways. One of the most interesting things we found through our research was just how creative this type of investing can be. Every day foundations are finding ways to help more people and organizations through investments and loans, while at the same time funding their own organization. Talk about smart business!

For the full text, please click here to visit Exponent Philanthropy’s resources page. For this, and more, from Foundant Technologies please visit our Resources Page