Investing in the Mission and Beyond

Mission-driven investing is not a single product or strategy. It is a body of work that many foundations are investigating as a means of increasing their impact in the field. It is the pursuit of both financial and social returns. Historically grounded in the use of negative screens, the field has shifted to be proactive in identifying investment opportunities that produce a mix of financial returns and social impact in line with a philanthropy’s mission.

A few foundations, like Casey and Heron, have paved the way in allocating significant portions of their endowment or corpus to mission-related investing. From the late ‘90s until now many foundations have invested significant time and money in aligning their commitment to supporting social change alongside their commitment to preserving assets. The key characteristics of pursuing mission-related investment activity include:

• developing a clear risk and return profile for the organization
• determining the dollar amount of investment and time period allowed to recognize return/impact
• creating an asset utilization strategy for cash, equities, bonds, alternatives, etc.
• identifying a pipeline of deals comprised of direct and/or indirect investment opportunities

It is important to note that mission-driven investing is an option for institutions of all sizes. While typically characterized by large foundations, there is a role for community and public foundations. At Tides we are committed to leveraging the interest of individual donors as early stage, risk capital investors supporting emerging deals that can be further supported and scaled by larger institutions. Through partnerships and pooled investment vehicles there is an opportunity to replicate Heron’s investment continuum and support whole portfolio activation of individual and institutional donors.

Over the past couple of years the returns on mission-driven investments have outpaced traditional investing. As interest increases in the field, there is a need to collaborate and learn. Groups like More for Mission and PRI Makers, and institutions like Kellogg, Babcock, and Kresge are great resources for those institutions that are just starting or interested in doing more in this space. What will you do to align your assets to produce a financial and social return?

Melissa Bradley is CEO of the Tides Foundation