Blog
-
Casey Foundation Pledges another $25 Million for social investments bringing total to $125 million
March 05, 2010By Lisa Hagerman, Friday, March 5th, 2010
The Annie E. Casey Foundation announced yesterday an additional $25 million allocation for social investments expanding their social investment program to $125 million or 5 percent of the philanthropy’s $2.5 billion endowment. The Foundation plans to target a portion of the additional funding to its program strategies in
The press release (download PDF) quotes mission investing pioneers Christa Velasquez and Doug Nelson:
“Social investing is an important tool for aligning non-grantmaking dollars with programmatic priorities,” says Christa Velasquez, director of social investments at the Casey Foundation and co-chair of the PRI Makers Network, an association of over 90 grantmakers that use program-related and other investments to accomplish their philanthropic goals. “For example, applying this approach might result in a foundation with a commitment to home ownership investing in low-income housing or to entrepreneurship in venture capital, or commitment to underserved communities making deposits in community development banks and credit unions. A foundation with an environmentally focused mission might invest in clean technology, green collar jobs or sustainable real estate projects.”
“This decision represents a vote of confidence in a set of innovative solutions that can achieve greater social impact for kids, families and communities in spite of a reduced endowment,” says Douglas W. Nelson, president and CEO of the Annie E. Casey Foundation. “Social investments allow us to increase the resources dedicated to our programmatic work and stretch foundation dollars by reinvesting the money in programs that have shown the strongest results.”
Financial returns on Casey’s 2008 social investment portfolio reaffirms that mission investments can deliver on both the financial and social returns as Christa Velasquez notes in the More for Mission Spring 2009 Newsletter (download PDF):
“At year end 2008 the Annie E. Casey Foundation’s social investment portfolio was the best performing part of the foundation’s endowment. With an expected return of 3.5 percent we’re the only part of the endowment in positive territory. It is interesting, because Casey made the unusual choice of making program-related investments with below-market rates of return out of our endowment.”
-
Family Foundations Help Fuel Growth of Mission Investing
February 18, 2010by Lisa Hagerman, Thursday, February 18, 2010
According to a recent article in Private Asset Management, families have begun reevaluating their philanthropic programs due to recent portfolio declines and are supplementing their grant-giving with income-generating investments. In the article, Lisa Hagerman, Director of More for Mission, says that "family interest in MRI is now growing faster than interest from the larger foundations, mainly because families have smaller boards and direct donor involvement that can implement MRI ideas faster." The article also reports that some families are funneling more of their assets annually into mission investments ranging from publicly-traded solar tech names to subsidized below market rate investments.
More for Mission Leaders Circle member, The Russell Family Foundation is a prime example of this trend. Starting with a $1M pilot mission investment allocation in 2004, the foundation has expanded that pool to $10 M and now invests approximately 8% of its endowment in mission-related investments. Richard Woo, Chief Executive Officer, of The Russell Family Foundation spoke of TRFF's experience in mission investing at the recent Council on Foundations annual Family Philanthropy Conference in San Diego. He was joined in a session dedicated to mission related investing by Craig Muska, Investment Advisor at Threshold Group (TRFF’s investment advisory firm) with Peter Berliner, Managing Director, PRI Makers Network http://www.primakers.net/home moderating the conversation. The turnout was great with about 70 foundation leaders and investment advisors at the workshop. According to Woo the Q&A session was lively with lots of interest and thoughtful questions from the audience. One particular audience comment noted that the transparent and collaborative relationship between The Russell Family Foundation and its investment advisor, Threshold Group, is crucial to aligning the foundation’s social and financial goals. Woo believes: “If we expect to align our philanthropic mission with our investment goals, then we need to work hard to ensure greater alignment between our program staff and our investment advisors. That is the operating system that makes MRI work.”
-
Banking Organizations Channel Funding to Distressed Communities
January 13, 2010By Lisa Hagerman, January 13, 2010
Two national organizations -- the Community Development Bankers Association (CDBA) and Promontory Interfinancial Network, L.L.C. – announced in December 2009 that they will work together to channel more than $10 billion into America's most economically distressed communities over the next five years. The announcement was made during a signing ceremony to renew the organizations’ Banking on Communities program. Initiated in 2004, the program channels funding into underserved communities through US Treasury certified Community Development Financial Institutions (CDFIs). Under the initiative, socially motivated investors can receive up to $50 million of federal deposit insurance coverage when depositing funds in a community development bank that's a member of CDBA and the Promontory Network. The $50 million of federal insurance protection is made possible through a service offered to banks by Promontory: the Certificate of Deposit Accounts Registry Service®, or CDARS®. “Banking on Communities enables deposits to flow to underserved communities to finance housing, to launch new businesses, to fund child care centers – in short, to open the door to a better life for millions of Americans,” said Robert M. McGill, Chairman & CEO of Neighborhood National Bank, a CDFI located in San Diego, CA. “It stimulates economic growth, so we all benefit.” Dowload PDF to see the press release.
On a related note, More for Mission foundations are taking on mission-related cash investing, that involves investing CDs with community development financial institutions (CDFIs) or credit unions or placing a foundation’s operating cash in community development banks. See the mission related cash investing presentation (Download PDF) with examples from More for Mission members the Edward W. Hazen Foundation, Winthrop Rockefeller Foundation, and the W.K. Kellogg Foundation.
-
Launch of US Community Investing Index Strategy
December 14, 2009by Lisa Hagerman, December 14, 2009
State Street Global Advisors announced in December the launch of its US Community Investing Index Strategy that seeks to match the return and characteristics of the US Community Investing Index. Created in 2005 by the F.B. Heron Foundation in collaboration with Innovest Strategic Value Advisors (now Risk Metrics), the Index is comprised of approximately 330 large and mid-cap companies across sectors that show proactive engagement with economically underserved populations in rural and urban communities. The methodology evaluates a universe of companies across three pillars of community performance: strategic alignment, workforce development & wealth creation, and community engagement & corporate philanthropy. The Index has performed comparably to the S&P 500 since inception (November 2005) through September 2009, reflecting that community engagement is not only responsible management but good business. The US Community Investing Index (Download PDF) is a trademark of the F.B. Heron Foundation and has been licensed for use by State Street Global Advisors
-
Responsible Investment Consulting Discussed at SRI in the Rockies
November 03, 2009By David Wood, November 3rd, 2009
At SRI in the Rockies last week, my colleague Valerie Berezin and I presented on interviews we are conducting with investment consultants about the uptake of Responsible Investment in their industry niche. We have been asking a set of consultants who define themselves as engaged in Responsible Investment how ESG/Mission investing relates to their general process for assessing managers. The goals of the interviews were to get an understanding of how the consultants identify and evaluate ESG managers during their selection process and to see if they conduct any assessment for ESG manager or product impact. We have heard from many of the consultants that they do not have a set of standards against which they measure environmental and/or social impact. Instead, they use traditional tools of due diligence to made a determination on how committed a manager is to their Responsible Investment strategy. Social return on investment remains a work in progress, but consultants are not waiting on established measurement tools to enter the field.
In terms of mission investing, these important gatekeepers often follow the lead of their clients on which mission investment managers to evaluate -- our interviews have reaffirmed the notion that active conversations between endowments and consultants can be a productive means to advance the field.
The presentation can be viewed here.
-
Imprint Capital brings together mission investors in San Francisco
September 09, 2009Lisa Hagerman, Wednesday, September 9th, 2009
On a beautiful day in San Francisco close to 60 leaders representing intermediaries and foundation investors showed a commitment to seeking investment opportunities targeting financial, social, and environmental returns.
At the close of the SOCAP09 last week, Imprint Capital Advisors brought together leaders in the field of mission investing for an afternoon workshop, “Transforming Challenges into Opportunities with Impact Investments”. Imprint Capital Advisors, an advisory firm that specializes in developing and executing mission investing strategies for foundations and family offices, convened the session with sponsorship from the John D. & Catherine T. MacArthur Foundation, the Rockefeller Foundation, the San Francisco Foundation, Skoll Foundation, and the W.K. Kellogg Foundation. The session on Bridge & Working Capital Financing Strategies included successful debt investments from experienced and innovative intermediaries across the themes of education & health (NCB Capital Impact), arts & culture (Nonprofit Finance Fund), food & agriculture (RSF Social Finance), and housing (Low Income Investment Fund). Equity & Enterprise Growth showed opportunities across growing enterprises in cleantech (SFJ Ventures), education (New Schools Venture Fund) and small business lending (Opportunity Fund). Creative Leveraging Strategies provided rich examples from foundation leaders in PRIs, the MacArthur Foundation and the David & Lucille Packard Foundation, and leveraging strategies using for example New Markets Tax Credits equity investments in Self-Help and financing opportunities through One California Bank in partnership with for example the Small Business Administration (SBA) 7(a) Loan Program.
The discussion included some of the challenges posed by varied language in the field, complexities and successes stories of PRIs and the power of contractual guarantees as model mission investments. Antony Bugg-Levine from The Rockefeller Foundation wrapped up the day noting how the field has developed, acknowledging the significant contribution of forerunners in the field, and potential for collaboration and continued growth. Networking organizations including PRI Makers Network, More for Mission, and the Global Impact Investors Network (GIIN) shared information on opportunities for knowledge sharing and network building among foundations and other impact investors deploying a range of investment strategies for greater impact.
-
Mission investing workshop on Living Cities' Green Economy Opportunity Fund
August 10, 2009Lisa Hagerman, Monday, August 10th, 2009
On July 30th a small group of foundations came together at the Surdna Foundation in New York City to learn about Living Cities’ Green Economy Opportunity Fund, a new social investment vehicle that will provide capital for urban initiatives that create jobs and energy savings for low-income people, reduce carbon emissions, and deliver financial returns to investors.
Investments may include municipal revolving loan funds and bonds to finance energy efficiency retrofits as well as funds to intermediaries to provide working capital for expansion of green contractors and other businesses.
The afternoon meeting, organized in collaboration with the Confluence Philanthropy, a special project of Rockefeller Philanthropy Advisors, gathered five local foundations including the F.B. Heron Foundation and the Jessie Smith Noyes Foundation of the More for Mission Leaders Circle. The session was meant to be an informal opportunity to learn about the fund and ask practical questions related to the fund’s green programmatic priorities, geographic focus, and investment parameters. Foundations could provide feedback on the fund while still in formation and before formal fundraising begins. The discussion raised issues related to targeted returns and how from an investment officer’s perspective the investment might likely be made as a program-related investment and not through the foundation’s corpus. From a programmatic and strategy perspective questions raised related to the fund's structure in its ability to deliver on the social and environmental returns. Given a mission-based foundation investor will likely analyze the investment through either an environmental or community development lens, making clear the potential benefits and linkages between environment, economy, and people will be key factors for investors.
-
Rural Mission Investing a topic at the Council on Foundations Rural Philanthropy Conference
July 29, 2009David Wood, Wednesday, July 29th, 2009
At the Council on Foundations Rural Philanthropy Conference, held in Little Rock Arkansas July 13-15, rural mission investing was a topic integrated both into an economic development track and we also had a breakfast on the topic that drew 25 people at 7:30 in the morning (it was already hot). Founder’s Circle Member Annie E. Casey, and new Leader’s Circle member Winthrop Rockefeller Foundation spoke about their experiences in using MRIs and PRIs in rural areas (Maine and Arkansas were featured examples), in vehicles ranging from CDFI lending institutions to venture capital. The economic development group took a tour of Helena-West Helena, Arkansas in the Mississippi Delta, where the Winthrop Rockefeller Foundation, in partnership with Southern Bancorp, have made creative use of grants and investments to support the new business activity and educational institutions in the area. Former President Bill Clinton spoke at the conference – held in the Clinton Presidential Library – and his focus on the economic needs of rural communities, and his highlighting of the green economy opportunities – underscored, from the mission investing perspective, the potential overlap in rural and environmental investment strategies. It was a thought-provoking and inspirational event.
From my perspective, the event also highlighted the potential for issue areas to illuminate key aspects of mission investing. Rural communities have different needs, and present different opportunities for mission investment too. New Leader’s Circle Member Community Foundation of the Ozarks, for instance, has just adopted mission investing and made its first direct investment in a rural hospital, which for reasons of location would have been very hard to underwrite by a conventional lending institution.
We are beginning a project that will review the barriers to and opportunities for rural mission investing. If you have thoughts, experiences, or contacts you are willing to share, we’d love to hear them!
-
California Endowment holds Mission Investing Forum: Building Healthy Communities
July 16, 2009Lisa Hagerman, Thursday, July 16th, 2009
On July 1 the California Endowment hosted a mission investing forum to explore how foundations can enhance their place-based and healthy community missions through mission investments. The California Endowment, a member of the More for Mission Leaders Circle, has committed $75 million of its endowment to invest in 14 distressed California communities. The mission is to transform these areas into places that are safe and healthy places for children to grow and learn.
The Mission Investing Forum gathered current mission investors, intermediaries, consultants, and researchers to address ways to accomplish mission objectives while maintaining a rigorous investment discipline—that achieves both financial and social goals. Examples from investors included presentations from the Meyer Memorial Trust (see presentation pdf), F.B. Heron Foundation, Bill and Melinda Gates Foundation, and the W.K. Kellogg Foundation. Examples of mission investing opportunities came from investment intermediaries (and their portfolio companies) at the intersection of providing access to housing, healthy food, capital, and education in California’s communities. The sessions addressed ways to think about where to make market rate investments in these areas and how to think through the opportunities and challenges of an integrated mission investing strategy. See the California Endowment’s website for several resources on the conference and a live blog of the forum.
-
Association of Small Foundations supports the More for Mission Campaign
June 29, 2009Lisa Hagerman, Monday, June 29th, 2009
In May 2008 the Association of Small Foundations (ASF) Board of Directors adopted a resolution in support of the More for Mission Campaign (at the time referred to as the 2% Campaign). The resolution encouraged small foundations to look into the campaign and decide if joining the campaign makes sense for their organization. The Triple EEE Foundation (ASF member and member of the More for Mission Leadership Committee) has similarly adopted a Board Resolution in which it seeks, “as an integral part of its own mission, to do what it can to increase the awareness of and use of mission investing by foundations throughout the country.”
Floyd Keene, President of the Triple EEE Foundation of Deerfield IL, is a strong proponent of mission investing. As of June 2009 the foundation’s assets are currently 100% mission invested. Amidst the downturn in the economy the foundation’s mission investments outperformed conventional investments. At year-end 2008 its portfolio was up 1.20% for the year compared to 35-40% decreases in market averages.
-
Seattle investors look at mission investment strategies
June 23, 2009On June 10th a diverse group of stakeholders (approximately 35 attendees) interested in mission investing across small foundation donors (staff and trustees), philanthropic wealth advisors, and others interested in the topic came together for a two-hour meeting in Seattle. The meeting was co-sponsored by the PRI Makers Network, Social Venture Partners, the Association of Small Foundations and Philanthropy Northwest.
Patricia Farrar-Rivas, Veris Wealth Partners and Derek Casteel, Community Capital Management presentation (PDF) covered essentials on the topic including: what is mission investing, why should you consider it, and how you might start the practice with examples of investments. Richard Woo, CEO, the Russell Family Foundation, told the story of how their foundation started mission investing and what they have learned in the process.
Peter Berliner of the PRI Makers Network moderated a lively Q&A discussion with questions that included:
- If there is a company in your portfolio whose values don’t align with yours, how do you decide whether to divest or engage in shareholder activism?
- How do you decide when to make a PRI as opposed to a traditional grant?
- When should you bring in an intermediary?
The answers varied based on the foundation type, their mission, and size. See the shareholder advocacy section for other resources on engaging in shareholder activism, resources on PRIs and links to existing databases with details on active intermediaries can be found at the PRI Makers Network.
- If there is a company in your portfolio whose values don’t align with yours, how do you decide whether to divest or engage in shareholder activism?
-
Mission investors-faith based and foundations-look at New Orleans
June 15, 2009The recent ICCR conference in
The Isaiah Funds is concentrating its first investments in Central City, and the tour took us on and around -
IRRC & Trucost study compels investors to evaluate carbon exposure of S&P 500
June 02, 2009Lisa Hagerman, Tuesday, June 2nd, 2009
A new study released today by the Investor Responsibility Research Center (IRRC) and Trucost, “Carbon Risks and Opportunities in the S&P 500” analyzes the potential financial implications of applying a carbon price to global emissions for companies listed on the S&P 500. Some of the highlights of from the press release on the report include:
- Carbon costs would total over $92.8 billion if a market price of $28.24 – Trucost’s estimate of the carbon market price in 2012 – were applied to each metric ton of emissions from companies in the S&P 500 and their direct suppliers such as electricity providers. This represents more than 1% of revenue from these companies, and some 5.5% of combined EBITDA.
- On a company-by-company basis, financial risk varies widely. Earnings could fall between less than 1% and 117% by company, if carbon costs were incurred.
“The cost of carbon emissions has been passed to the public and not reflected in the financial statements of companies,” said Jon Lukomnik, program director of the IRRC Institute, which commissioned the study. “The analysis makes clear that a cap-and-trade system is a real game changer. A number of companies will have to reform how they think about carbon emissions and the associated costs, or their
The press release can be downloaded here (PDF) and the full report is available at IRRC and Trucost websites. The report also is included in
- Carbon costs would total over $92.8 billion if a market price of $28.24 – Trucost’s estimate of the carbon market price in 2012 – were applied to each metric ton of emissions from companies in the S&P 500 and their direct suppliers such as electricity providers. This represents more than 1% of revenue from these companies, and some 5.5% of combined EBITDA.
-
Foundation and sovereign wealth fund delegates gather at the Business of Clean Energy in Alaska conference
May 19, 2009Lisa Hagerman, Tuesday, May 19th, 2009
The Business of Clean Energy in Alaska conference took place this week in Anchorage to showcase the opportunities available for Alaska in building an Energy Efficiency and Renewable Energy infrastructure. The conference was organized by the Alaska Renewable Energy Project with sponsorship from, among others, the Alaska Conservation Foundation. The two-day event brought together close to 200 business leaders, state legislators, venture capitalists and investors from Alaska and across the country. A panel on the Alaska Permanent Fund included: Pat Galvin, Commissioner, State of Alaska Department of Revenue, and on the Board of the Alaska Permanent Fund, Hege Eliassen, Counselor of Financial Affairs at the Royal Norwegian Embassy representing the Norwegian Government Sovereign Wealth Fund-Global, and Lisa Hagerman from the Boston College Institute for Responsible Investment with examples of other investors across foundations, public pension funds, and sovereign wealth funds. Presentations will soon be available at Renewable Energy Alaska.
Pat Galvin gave an overview of the structure and current asset allocation (See current asset allocation distribution on website) of the Permanent fund that as of May 2009 holds $30.4 billion in assets (unaudited). The Fund was established in the 1970s by constitutional amendment in which, “At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments." In 1982, the Legislature established the Alaska Permanent Fund Corporation to manage fund investments. A six-member, governor-appointed Board of Trustees oversees APFC, in which Pat Galvin sits on the board. APFC is a state-owned corporation, based in Juneau, that also manages other funds designated by law, such as the Alaska Mental Health Trust Fund cash assets.
The discussion moderated by Steve Lindbeck, Alaska Public Communications, shared examples across Norway’s Global Fund, one of the world’s largest sovereign wealth funds with $300 billion in assets, that maintains a long-term investment perspective and in April 2009 after evaluation of existing ethical guidelines the government decided to consider environmental, social, and governance factors be integrated to an even greater extent in all aspects of the fund's management. A recent NYT article (May 14, 2009) highlights the virtues of Norway’s long-term investment strategy as they can take on illiquid long-term positions given their future liabilities structure. The intent of the panel was to show examples of other institutional investors in the US and overseas as a reference for the possibility of using the Alaska Permanent Fund to help secure financing needed for Alaska-based projects. The discussion started the conversation and was timely as the Alaska Permanent Fund held a public board meeting to review the fund’s investment asset allocation policy the following two-days May 20-21. See may 20 board meeting agenda.
-
EIRIS Foundation research shows European foundations should consider ESG risks to safeguard assets
May 16, 2009Lisa Hagerman, Friday, May 16th, 2009
UK based EIRIS Foundation and its independent research arm, released new research this week showing that trusts and foundations should re-think their investment analysis and examine ESG issues such as how climate change and corporate governance pose financial risks and opportunities. The report authored by Sam Collin, Charity Adviser at the EIRIS Foundation highlights 8 steps that trusts and foundations should take in managing investments in a sustainable way:
1) Agree on position in responsible investment
2) Research investment manager’s expertise and practice on ESG integration
3) Include ESG integration in the investment mandate
4) Join collaborative initiatives, such as the Carbon Disclose Project
5) Vote shares on ESG related issues
6) Engage with companies directly or via investment managers
7) Invest in sustainability-themed funds such as greentech, microfinance or timber
8) Invest in responsible investment funds that use ESG integration
-
Mission investing leaders and other foundations gather in Atlanta
May 05, 2009Lisa Hagerman, Tuesday, May 5th, 2009
The More for Mission Campaign Reception was held in Atlanta on May 5th at the Council on Foundations Annual Meeting. We were pleased with the turnout from our Leadership Committee members and other interested foundations wanting to learn more about the practice of mission investing and network with leaders in the field. Doug Stamm, CEO, Meyer Memorial Trust gave opening remarks and talked about the momentum being built for the More for Mission Campaign and encouraged foundations to join the Campaign and learn from tools available such as quarterly conference calls with thought leaders on trends in the industry.
Anne Mosle, VP Programs, at the W.K. Kellogg Foundation talked about their mission-driven investing (MDI) pilot investment program in which it has earmarked $100 million of its endowment assets for a pilot program in mission-driven investing. Of the $100 million, $25 million has been designated to mission-driven investments in southern Africa, while the balance – $75 million – will be used for investments in the United States. The Kellogg Foundation’s MDI criteria includes: how investments fit with the foundation’s mission objectives, leverage of the Kellogg Foundation’s programming investments – particular focus will be given to innovative, scalable new approaches to deploying capital for impact vs. more traditional mission investments (e.g. low interest loans), magnitude of potential impact, minority/gender partnership opportunity. The W.K. Kellogg Foundation is aggressively committing capital and will soon issue a press release on new commitments. Their website has several learning tools for other foundations.
A working group gathered around rural investing opportunities that included representatives from the Annie E. Casey Foundation, the Mary Babcock Reynolds, and the Winthrop Rockefeller Foundation.
-
Handbook for Climate-Related Investment across Asset Classes provides a guide for mission investors
April 22, 2009David Wood, Wednesday, April 22nd, 2009
The Boston College Institute for Responsible Investment has just published a Handbook for Climate-Related Investment across Asset Classes, a survey of portfolio-wide strategies for investors to manage the risks and opportunities related to climate change. It covers eight asset classes – cash, fixed-income, public equity, private equity, real estate, hedge funds, commodities, and infrastructure – and is meant to help investors:
• Devise a portfolio-wide strategy to climate-related investing;
• Identify the asset class specific considerations for climate-related investing; and
• Highlight existing and potential investment opportunities across asset
classes.We hope that it is of use to mission investors as they consider how climate change can impact their endowments, and vice versa. The handbook is a followup to the Handbook on Responsible Investment Across Asset Classes published in late 2007.
-
Threshold Group gathers a Community of private family investors and others interested in Mission-Related Investing
April 17, 2009Lisa Hagerman, Friday, April 17th, 2009
Threshold Group, a multi-family office headquartered in Gig Harbor, WA, has created a virtual “C-MRI” (Community for Mission-Related Investing) to provide a friendly forum to exchange ideas on mission investing trends in the Pacific Northwest and elsewhere. Leadership Committee member, The Russell Family Foundation, in Gig Harbor, WA as well as the Massena Foundation, of Seattle are among the call participants.
-
Consultants in Responsible Investing show MRI opportunities abound
April 06, 2009Lisa Hagerman, Monday, April 6th, 2009
A group of 35 consultants and other stakeholders from across the country gathered at Boston College to discuss the field of responsible investing consulting at a one-day event, "The Evolution of Responsible Investment Consulting." The conveners, David Wood, Director of the Boston College Institute for Responsible Investment (IRI), and Valerie LaVoie, Research Associate at the IRI brought together a distinguished group of investment consultants ranging from larger consultants to the boutique firms all engaged at varying levels in broadly, advising their clients on responsible investing strategies and investment opportunities. The range of consultants included those with clients across different types of institutional investors including foundations, private and public pension funds. The day included thoughtful discussion and exchange on the state of the field and definitional issues, crafting a methodology in responsible investing, and tools needed to advance the field on both the demand and supply side.
The lively discussion showed that there is a growing pipeline of product offerings across both the public and private markets by asset classes targeting market-rate financial returns along with ancillary social impacts.
To see a copy of the meeting agenda click here (PDF). Summary notes and next steps to further the field of responsible investment consulting will soon be made available at the Boston College IRI.
-
Mission investing opportunities: CCM webcast on Green Approaches to Fixed Income Investing
March 25, 2009Lisa Hagerman, Wednesday, March 25th, 2009
Mission-driven investors are becoming more interested in green fixed income opportunities (e.g. green certified energy efficient buildings) as an easy point of first entry into mission investing, with new investment products available that support a foundation’s social and environmental returns while offering stable financial returns.
According to the Environmental Protection Agency (EPA), buildings account for 39% of total energy consumption, 38% of carbon emissions, 30% of raw materials waste in landfills, and 12% of potable water consumption. Green approaches to fixed income investments supporting green buildings reduces energy consumption costs and provides safe and healthy living environments—a broader mission of foundations. See full article by Robert Kropp at Sustainability Investment News.
David Wood, Director, Boston College Institute for Responsible Investment, moderated the webcast, “Green Approaches to Fixed Income Investing”, on March 18th hosted by Community Capital Management (CCM), a Florida-based registered investment advisor that provides fixed income strategies to institutional investors.
The webcast gathered a large crowd (165 participants) representing a cross-section of stakeholders including investors (banks, foundations, and public pension funds), consultants, and investment fund managers.
Barbara VanScoy, Executive Vice President and Senior Portfolio Manager for Community Capital Management presented their "non-traditional" Core Fixed Income strategy, which invests in taxable municipal bonds, multifamily mortgage-backed securities, asset-backed securities that support enterprise development, and targeted single-family securities that support affordable and responsible home ownership. "We now provide investors the opportunity to designate that the proceeds of their investment will be used to purchase securities that support environmental initiatives," said Barbara VanScoy. As of 12/31/08, approximately 17% of assets in the firm's composite of Core Fixed Income portfolios were allocated to U.S. agency multifamily mortgage-backed securities, which generated a quarterly return of 5%. Many of these instruments are collateralized by mortgages on affordable rental properties that incorporate green design features promoting smart growth, energy efficiency, and resource conservation.
Michael Furze, Green Initiative Specialist, spoke on the New Mexico Mortgage Finance Authority (MFA), a public-private partnership created by the state legislature in 1975 that has provided $3.9 billion in affordable housing finance options for low to moderate-income New Mexicans. Michael Furze presented on green building initiatives at MFA that receive Leadership in Energy and Environmental Design (LEED) ratings and Energy Star (an EPA program) designation.
To download presentations click here.
-
More for Mission Leadership Committee member - The California Endowment - commits $75 million to mission investing
March 17, 2009Lisa Hagerman, Tuesday, March 17th, 2009
The California Endowment joined the More for Mission Leadership Committee this month. In late 2008 the foundation committed $75 million to mission investing. The foundation will seek opportunities for mission investments that align with the California Endowment’s new 10-year strategic direction (2010-2020): Building Healthy Communities. The goal of this place-based strategy is to transform distressed California communities into neighborhoods that are safe and healthy places for children to grow and learn. The California Endowment has recently selected 14 communities, impacted by low health outcomes, yet with the potential to develop into model communities. Building Healthy Communities connects to the foundation’s broader policy strategy statewide so that it can affect systems change throughout California. Learn more at: The California Endowment: Building Healthy Communities
-
Mission Investing Comes in Many Forms - Responsible Contracting Policies
March 09, 2009David Wood, Monday, March 9th, 2009
Mission investing comes in many forms: the Atkinson Charitable Foundation in Canada, for instance, has undertaken a multi-stakeholder project backed by the Atkinson Charitable Foundation, designed to create a model Responsible Contracting Policy for Canadian investors, as a way to address the social problems caused by precarious employment especially in the property services sector. Engagement with real estate fund managers can be understood as both a way to improve long-term performance by supporting stable and quality employment it is also a tool for achieving the foundation¹s mission to promote social justice.
As part of this work, the Boston College Institute for Responsible Investment participated in a study, with Shareholder Association for Research and Education (SHARE) and the Carleton Centre for Community Innovation, on the potential for Responsible Contracting Policies to be adopted in Canada. You can read the study here.
-
President Obama's FY 2010 Budget: A New Era of Responsibility - Doubles Funding for CDFI Fund
March 02, 2009Lisa Hagerman, Monday, March 2nd, 2009
President Obama unveiled his FY2010 budget outline that requests a doubling of the CDFI Fund allocation expected to be at over $200 million making it the highest appropriation level in the CDFI Fund history. CDFI Fund Director Donna Gambrell comments:
"I am very pleased to know that President Obama views the CDFI Fund and the programs we administer as a key part of his strategy to address the economic challenges facing our nation’s low-income urban, rural and Native communities," said CDFI Fund Director Donna Gambrell. "With the additional funding made available through the Recovery Act, and the potential for doubling our appropriations through the fiscal year 2010 budget, I know that Community Development Financial Institutions and Community Development Entities will be responsible and active partners in President Obama’s efforts to restore opportunity and prosperity across this great country."
Learn more through the CDFI Coalition, that advocates on behalf of the CDFI industry and educates the public about community development finance, and at CDFI Coalition E-news: CDFIs Making an Impact! (2/26/09).
-
Investing with Impact: foundations in Southern California explore mission investing strategies
February 19, 2009Lisa Hagerman, Thursday, February 19th, 2009
A workshop on mission investing was held in the Los Angeles office of the Federal Reserve Bank of San Francisco. The event was a collaborative effort, sponsored by Wall Street Without Walls, the Milken Institute, the Federal Reserve Bank of San Francisco, Bay Area Council, Southern California Grantmakers, Association of Small Foundations, Rockefeller Philanthropy Advisors, AltruShare Securities, and Impact Community Capital!
The event brought together foundations from Southern California interested in mission investing—with the discussion on both below-market investments and market-rate investments across the asset classes of fixed income, private equity (venture capital), and equity real estate. The luncheon discussion included presentations from Leadership Committee member, Kate Starr of the F.B. Heron Foundation along with another institutional investor (public pension fund) and proponent of targeted investing—Sean Harrigan of the Los Angeles Fire & Police Commission. The virtues of mission investing were highlighted throughout the day emphasizing the importance of mission investing as an overall investment strategy for foundations. Presentations are available on the Wall Street Without Walls website.
-
More for Mission member, Needmor Fund, presents virtues of sustainable equity screens in a volatile market
January 27, 2009Lisa Hagerman, Tuesday, January 27th, 2009
Sarah Stranahan, Needmor Fund Board Member, tells a “Tale of Two Foundations”(PDF) in which the Needmor Fund did 4.5% better (annual return as of 10/31/08) compared to another traditional foundation—that is not a mission investor.
Sarah’s theory that in a down market or a bull market their screened equity managers have a consistent quality bent investing in:
“Companies with good environmental policies, good employment policies and good corporate governance that tend to have management that is ethical, cautious, unwilling to incur large debt, willing to defer immediate gain to protect the company from future risk, and slow to capitalize on short term trends that do not increase long term value.”
While ultimately investment performance depends on strategic asset allocation and a rigorous investment philosophy, the “Tale of Two Foundations” suggests that disciplined equity screens tend to outperform in volatile markets.
The “Tale of Two Foundations” also reports that over the five year period the Needmor Fund outperformed the traditional foundation by only .4%. Sarah goes on to say in a recent Responsible Investor article: Why are we trying to prove that we are as good as the dominant markets? The dominant markets have failed dismally and that the time is now for systemic reform. See the full article in Responsible Investor, Systemic reform is the only course for ‘decimated’ investors.
-
Krosinsky & Robins book offer insights on the spectrum of socially responsible investments
January 23, 2009Lisa Hagerman, Friday, January 23rd, 2009
KLD Research & Analytics hosts a reception and book signing for Cary Krosinsky, of Trucost Inc., on January 23, 2009.
This book covers the rise of sustainable investing and the value in long-term investing that incorporates environmental, social and corporate governance (ESG) factors into the investment decision-making process. There is an excellent chapter on fiduciary duty by Stephen Viederman, member of the More for Mission Leadership Committee with the Christopher Reynolds Foundation.
Particularly noteworthy is the chapter on -- Sustainable Equity Investing: The Market-Beating Strategy-- and how social, ethical and sustainable investment strategies are positively correlated with financial return. Cary Krosinsky and Nick Robins shows that sustainable investing funds have significantly outperformed mainstream indices, returning 18.7%, on average, over the five year period (12/31/02 -12/31/07) versus the MSCI World, S&P 500 and FTSE 100’s returns of 17%, 13.2% and 13% respectively.
-
Community development banks in the news--opportunities for mission investors
January 13, 2009Lisa Hagerman, Tuesday, January 13th, 2009
Community Development Finance Institutions (CDFIs) have been getting some positive press lately. Greg Fairchild Associate Professor at the
Recent press on community banks (See Crain’s New York Business Article November 24, 2008) talks about how as major banks scale back their small business lending, it has created more opportunities for the smaller community banks—that often keep their loans rather than reselling them and follow a due diligence process that emphasizes a company’s finances and credit history. Carver Federal Savings Bank projects a 15% increase in small business loans this year, with most deals in the $100,000 to $2.5 million range. Carver Federal Savings Bank is a member of the Certificate of Deposit Account Registry Service (CDARS), a deposit-placement service that allows deposits with member institutions to be eligible for full FDIC insurance of up to as much as $50 million.
More for Mission Leadership Committee member, W.K. Kellogg Foundation, has deposited $22.4 million in community banks and credit unions—part of their “mission-driven” commitment (See W.K. Kellogg press release). Carver Federal Savings Bank and ShoreBank, the largest CDFI, are among the seven selected banks.
-
How are mission investments holding up in a down market?
December 16, 2008Lisa Hagerman, Tuesday, December 16th, 2008
Welcome to the More for Mission Campaign blog. We hope to hear from you with your thoughts, trends, and general news on what is happening in mission investing. How are program-related Investments holding up in a down market? We don’t have comprehensive data, but here are two examples worth noting.
Faith Brown, Acting President & CEO of the Vermont Community Foundation, reports that as of 9.30.08 the Vermont Community Foundation’s mission investments of $5.8 million in the state of Vermont returned 2.6% per annum during the last five years (net of management fees). On the social returns side of the question, data through 2007 across community investing, venture capital, and bond funds totaled 119 affordable housing units, 30 affordable housing mortgages, 31 businesses financed, 2 community facilities financed, and 407 jobs created.
The F.B. Heron Foundation reports a return of 3% on program-related investments (through 10.31.08) and estimates the annual return for 2008 will be 3.6%.
On market rate investments, the F.B. Heron Foundation reports on the the U.S. Community Investing Index, designed in conjunction with Innovest Strategic Value Advisors (symbol: CMTYIDX) that distinguishes publicly traded companies (subset S&P 900 firms) with superior practices on a series of screens that measure commitment and engagement with urban and rural economically disadvantaged communities in the U.S. Luther Ragin, Vice President, Investments at the Heron Foundation points out that even with significant losses in these troubled financial times, the U.S. Community Investing Index has outperformed the S&P 500 by 1.5%, a relative bright spot amid absolutely bleak numbers for the markets. For more on the F.B. Heron Foundation, and mission investing generally, see this article in the November 17th issue of the Chronicle of Philanthropy.
We hope to hear from you with your stories on mission investing, debates, and resources that will be useful to foundations new to the practice.
del.icio.us 
Digg 
Reddit latest posts
-
Casey Foundation Pledges another $25 Million for social investments bringing total to $125 million
March 5th, 2010 -
Family Foundations Help Fuel Growth of Mission Investing
February 18th, 2010 -
Banking Organizations Channel Funding to Distressed Communities
January 13th, 2010 -
Launch of US Community Investing Index Strategy
December 14th, 2009 -
Responsible Investment Consulting Discussed at SRI in the Rockies
November 3rd, 2009 -
Imprint Capital brings together mission investors in San Francisco
September 9th, 2009 -
Mission investing workshop on Living Cities' Green Economy Opportunity Fund
August 10th, 2009 -
Rural Mission Investing a topic at the Council on Foundations Rural Philanthropy Conference
July 29th, 2009 -
California Endowment holds Mission Investing Forum: Building Healthy Communities
July 16th, 2009 -
Association of Small Foundations supports the More for Mission Campaign
June 29th, 2009 -
Seattle investors look at mission investment strategies
June 23rd, 2009 -
Mission investors-faith based and foundations-look at New Orleans
June 15th, 2009 -
IRRC & Trucost study compels investors to evaluate carbon exposure of S&P 500
June 2nd, 2009 -
Foundation and sovereign wealth fund delegates gather at the Business of Clean Energy in Alaska conference
May 19th, 2009 -
EIRIS Foundation research shows European foundations should consider ESG risks to safeguard assets
May 16th, 2009 -
Mission investing leaders and other foundations gather in Atlanta
May 5th, 2009 -
Handbook for Climate-Related Investment across Asset Classes provides a guide for mission investors
April 22nd, 2009 -
Threshold Group gathers a Community of private family investors and others interested in Mission-Related Investing
April 17th, 2009 -
Consultants in Responsible Investing show MRI opportunities abound
April 6th, 2009 -
Mission investing opportunities: CCM webcast on Green Approaches to Fixed Income Investing
March 25th, 2009 -
More for Mission Leadership Committee member - The California Endowment - commits $75 million to mission investing
March 17th, 2009 -
Mission Investing Comes in Many Forms - Responsible Contracting Policies
March 9th, 2009 -
President Obama's FY 2010 Budget: A New Era of Responsibility - Doubles Funding for CDFI Fund
March 2nd, 2009 -
Investing with Impact: foundations in Southern California explore mission investing strategies
February 19th, 2009 -
More for Mission member, Needmor Fund, presents virtues of sustainable equity screens in a volatile market
January 27th, 2009 -
Krosinsky & Robins book offer insights on the spectrum of socially responsible investments
January 23rd, 2009 -
Community development banks in the news--opportunities for mission investors
January 13th, 2009 -
How are mission investments holding up in a down market?
December 16th, 2008
RSS Subscribe