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If foundations are to achieve their lofty ambitions for social impact, they must find creative ways to use every resource they possess. Enter mission investing (now more popularly called impact investing), a practice of using financial investments as tools to achieve a foundation’s mission. In the past decade, this practice has grown significantly in foundations of all sizes and types. Written in 2007, Compounding Impact provides a study of the landscape of mission investing by U.S. foundations.
Top Takeaways
- Foundations have 3 primary motivations for mission investing: recovering philanthropic funds for future use, achieving social benefits in ways that grants cannot, and aligning assets with the mission.
- Approaches to mission investing include “screening” on social or environmental criteria; shareholder advocacy and proxy voting; and proactive mission investing.
- To continue the momentum, improved performance measurement, record keeping, and information sharing must be developed.
Mission investments are financial instruments made with the intention of (1) furthering a foundation’s mission and (2) recovering the principal invested or earning financial returns.
