Monday, January 4, 2016
On Philanthropy: All Investing is Impact Investing (Rockefeller Brothers Fund, F.B. Heron Foundation)
In the United States, nearly $1 trillion is committed to philanthropy - sitting in foundations and donor-advised funds. Donors have transferred ownership of these funds to separate legal entities and received generous tax deductions in order for those monies to fund charitable work in the world.
Yet only a small percentage of those funds is expended on charitable donations for the public good. The great majority of those resources are invested for a financial return without regard to the impact on society.
Philanthropically committed funds are traditionally divided into two silos: grants for social impact and investments for financial growth. . .
Recently, philanthropic and investment leaders have come to recognize that grants and investments can have both financial returns and social impact - and that strategic alignment and integration with mission is important to maximize real change.
Examples include the divestment of the $860 million Rockefellers Brothers Fund, built on oil wealth, from all of its fossil fuel investments; the $24 billion Yale University endowment directing its money managers to examine how investments affect climate change and avoid investing in companies not taking steps to reduce greenhouse gas emissions; the $260 million F.B. Heron Foundation focused on helping disadvantaged communities, aligning 100 percent of its capital with its mission; and the $3.5 billion Kresge Foundation, committing 10 percent of its endowment into impact investing over the next five years. . .