In the new report that we co-authored with the Nathan Cummings Foundation (NCF), we share how the foundation transitioned to 100% mission-aligned investing, their plans to go deeper on advancing racial equity, and findings from our landscape analysis of the mission-aligned investing field.
We are honored to have learned alongside NCF and proud of this research aimed at helping other foundations to wrestle with vital questions about power, accountability, and impact.
The reasons why foundations should move to 100% mission-aligned investing are many. In their letter to peer funders, NCF Board Chair, Jaimie Mayer, and Interim CEO Rey Ramsey write, “We didn’t want to invest in the companies that cause harm in the communities we serve. Why give with one hand while taking away with the other? Instead, we wanted to make investments that could amplify the work of our grantees. Why use only a portion of our assets for impact when we could use them all?”
Each month, on our blog, we are going to highlight one key finding from the report. This month, we’re talking financial returns and impact:
In conversations about mission-aligned investing, philanthropic leaders often raise concerns about the potential for increased risk or dampened returns. But, we observed no negative correlation between the portion of a firm’s assets dedicated to impact and its financial performance. On the contrary, we found that institutions working with an outsourced chief investment officer (OCIO) are not required to sacrifice financial returns to apply a mission-aligned approach to their investing. This finding builds on empirical research that concluded that portfolios screened for environmental, social, and governance performance do not negatively impact returns, nor do they experience additional volatility.
Intrigued? For more on the gatekeeping role played by OCIOs, and why foundations need to address the transfer of economic power through their investments, check out the full report.