By Lisa Hagerman, Director, More for Mission
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I was pleased to speak recently at an event sponsored by the Washington Regional Association of Grantmakers at the Eugene & Agnes E. Meyer Foundation’s community conference center. The center, an energy-efficient office easily accessible by public transportation was an excellent space to inspire conversation regarding mission-aligned investing.
Our discussion focused on how foundations can better leverage their endowment assets to achieve their mission. The practice of mission investing is driven by investor intent, and focuses on the dual objectives of furthering foundation mission and programmatic goals while earning financial returns. It covers two distinct categories of investments: Market-rate mission-related investments (MRIs) that broadly support mission goals and seek competitive risk-adjusted market rates of return and Program-Related Investments (PRIs) structured to create specific programmatic benefits while earning a below-market return.
During the discussion, one grantmaker raised the important question of whether mission investing is a viable investment strategy given the downturn in the economy and foundation endowments significantly reduced.
I believe the timing is right for foundations to re-think their investment strategy and consider mission investing from a portfolio approach. Many foundations agree; in a Fall 2009 survey of More for Mission member foundations, 85% of respondents had maintained or increased their commitment to mission investment during the economic downturn. The W.K. Kellogg Foundation stated in the Fall 2009 survey, “Our commitment is strong and growing. It has made our cash deposit strategy more relevant.” Similarly, the California Endowment noted, “We have been in the process of developing our mission investing strategy and the economic downturn has informed the development of that strategy and has forced us to re-evaluate our traditional investment philosophy and approach.”
With the new norm of reduced endowments and limited resources, many foundations are looking for innovative ways to achieve impact beyond traditional grantmaking. Now is a good time to put the endowment to work.
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* More for Mission will hold an annual conference on September 21, 2010 at the Harvard Kennedy School on the topic of mission investing. For more information contact Lisa Hagerman at lisa_hagerman@hks.harvard.edu.
* More for Mission is based at the Initiative for Responsible Investment of the Hauser Center for Nonprofit Organizations at Harvard University. It was founded by three pioneers in the field of mission investing: the Annie E. Casey Foundation, the F.B. Heron Foundation, and the Meyer Memorial Trust. As of May 2010 More for Mission’s network of mission-driven foundations includes 70 participating foundations that collectively represent $32 billion in total assets. To learn more about mission investing and see past issues of the e-journal see the resources section of the More for Mission website. For more information please contact Lisa Hagerman, Director, More for Mission, at 617.496.2213 or lisa_hagerman@hks.harvard.edu.
