Foundations and investing

Please vote in the poll - should foundations take their missions into account when they set their investment policies? Go to Philanthropy 2173 before January 31st to register your thoughts.

In the meantime, while you are thinking about it, here are some resources from the field.

Those who favor using endowment assets for mission-related purposes:
Jed Emerson's work on Blended Value is critical to the whole field of foundation investments.

The Calvert Foundation has resources here and a set of core strategies on Social Investing can be found here.

The F. B. Heron Foundation discusses their strategy here and the Jessie Smith Noyes Foundation's information on mission related investing is here, their self-published track record on shareholder activism is here.

You also can find the Noyes Foundation's investment policy here. It includes their definition of fiduciary responsibility, which reads, in part, "
We recognize that our fiduciary responsibility does not end with maximizing return and minimizing risk.... We believe that foundations have a particular role to play in this process, seeing their mission not only in terms of the uses of income to fund programs, but also in terms of the ends toward which endowment assets are managed. We believe that it is essential to reduce the dissonance between philanthropic mission and endowment management."

Finally, Alex Steffen over at worldchanging.com responded to the LA Times article with this post, which includes a call for three new characteristics of foundations:

  • Practice holistic assessment.
  • Seek transformative impact.
  • Offer utter transparency
Here's what I found arguing against social responsibility investing (besides everything Milton Friedman ever wrote). This is to say, I found very little, other than some oversimplified discussion of good and evil over at gifthub. Other than the argument that you must seek the best financial return (an argument which is increasingly specious as screened portfolios are returning better and better, and socially screened mutual funds have been growing even during times of general industry contraction) (Social Investment Forum, Lipper Research ), there is no argument for employing your personal, family, corporate or community values on one side of the ledger and ignoring them on the other.


And, by the way, here's what several economists have to say about the discussion. (be sure to read the comments)


1 comment:

Anonymous said...

for the calvert foundation link try http://www.calvertfoundation.org - thanks!

tim freundlich
calvert foundation