What Are Our Recommendations For Getting Started?

Q: How to generate deal flow?

A: Some thoughts on finding deals:

  • Know that your investment advisor is seeing SMSIs all the time. You can help her bring these deals to you by holding her accountable to provide SMSI opportunities at your quarterly investment meetings.
  • Make sure your investment advisor knows what your foundation mission and programs are so she can be looking for investments that align.
  • Network with your peers. Ask other like-minded and similarly focused foundations to alert you if they are approached with mission related investments.
  • Get the word out. If you let your grantee community know that you are looking for mission related investments, you will most likely start to see a few cross your desk.
  • Attend conferences on SMSIs. If you haven’t been invited, ask to be put on the mailing list. Continue to check our website resource list for upcoming seminars and conference resources.
  • Form an SMSI Peer Action Group with other like-minded investors (colleagues, friends, family). Use your collective power to share deals, influence your advisors and learn together.

Q: How to analyze deals?

A: Some thoughts on deal evaluation:

  • Use an MRI/PRI Evaluator tool tailored by you and your investment advisor.
  • Let your investment advisor know that you expect a full financial due diligence process on SMSI recommendations – the same due diligence they would perform for any other investment recommendation.
  • Tell her that you will perform the mission / program related due diligence. This will require contacting the principals.
  • Ask other SMSI investors to share their due diligence process so you can continue to hone your own.

Q: How to monitor results?

A: Some thoughts on monitoring:

  • Build in monitoring expectations at the front end. Set expectations with your investment advisor and with the investee during the due diligence process.
  • Decide on appropriate benchmarks for measuring performance for both financial as well as mission and program related performance.
  • Review these benchmarks either quarterly or annually as appropriate to the investment.

Q: How to convince your investment advisor?

A: At a recent meeting of like-minded SMSI investors, the single most effective tool cited for getting your investment advisor to participate in SMSIs is tenacity. You may want to share the following with your advisor:

  • In 2005, nearly one out of ten investment dollars was actively involved in socially responsible investments.
  • In 2006, the Social Investment Research Analysts Network (SIRAN) found that 79 companies in the S&P 100 Index included special sections on their websites, providing information on their social and environmental policies and performances. This is a 34% increase over 2005. You can bet we will see an increase again in 2007.
  • Remind your advisor that you are the steward of these funds and she works for you.
  • Let your advisor know that there are other investment advisors who are actively involved in this growing space and you may consider moving the funds. This will certainly get her attention.
  • Provide your advisor with an SMSI investment objective to be met over a 5 year period and let her know that she will be evaluated on how well she meets this objective as well as meeting the ROI. Tell your advisor that you do not accept the myth that both cannot be achieved.
  • Bring your advisor copies of an MRI / PRI Evaluator tool tailored to align with your mission and programs. There is a template on this website for your use.

Q: How to optimize for deal flow success?

A: Consider the following:

  • Get your investment and philanthropic advisors on board
  • Set an SMSI investment goal
  • Include SMSI updates in your quarterly investment review meetings
  • Work with your advisors to tailor the MRI / PRI Evaluator so that they are clear regarding your expectations
  • Check out the resource list on this website and share it with your advisors. Read and discuss the information with your advisors.
  • Network with like-minded individuals and foundations
  • Attend SMSI related conferences
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