Investment Strategy

Our Foundation takes a purposeful and proactive approach to aligning its investment strategy with our values, mission, and programs. We have found there is only partial consensus on social investment terminology. When possible, we use well established terms like Program Related Investments and Socially Responsible Investments. We use Program Related Investments in the strict IRS sense and we use Socially Responsible Investments (SRIs) to refer to negatively screened investment opportunities, e.g., avoiding investments in tobacco, arms and the like. For more effective communication and monitoring, we have established our own terms and/or definitions, e.g., Sustainability Investments, Social Component Investments, and Mission Related Investments, all of which are defined later in this document. Additionally, we refer to our value, mission and program aligned investment strategy as Sustainability, Mission, and Social Investments (SMSI).

Our SMSI strategy informs all of our investments, not just our Foundation. Sometimes we use non-philanthropic capital, i.e., capital outside our Foundation, to compliment philanthropic investments. All SMSIs – the only exception being Program Related Investments – are pursued inside and/or outside the Foundation.

By aligning the investment strategies of all of our business entities with our values and mission, we create greater leverage in our impact. We believe this is the right and ethical thing to do. It enables us to use a wide range of investment vehicles to support social enterprises including grants, social loans, private equity, etc. Negative screening alone would not enable us to achieve our objectives and would limit investment opportunities which are aligned with our values and mission. Some funds, which have historically applied only negative screening in the past, are now evaluating sustainability metrics like workplace, community, and environment. These evolved funds would be eligible for our SMSI pipeline.

We follow a rigorous process for pipeline generation, deal analysis, implementation, monitoring and reporting. This process is supported by analysis and reporting tools, which we developed with our investment and philanthropic advisors. Our team works together to understand blended financial, social, and environmental risks and returns.

By sharing our investment strategy, we hope to enable and inspire others to develop or increase their mission and program related investments.

Our asset allocation drives our investment decisions. SMSIs – the only exception being Program Related Investments - need to conform to this asset allocation, i.e., all SMSIs (with the exception of PRIs) need to fall inside the currently established asset allocation targets of the Foundation. Non-conformant investment opportunities are treated as exceptions, and an analysis needs to be completed to evaluate a potential change in targets. Changes need to be accepted and adopted under the investment policy guidelines of the Foundation before proceeding. Hence, our SMSI strategy is integrated into our asset allocation strategy.

SMSIs – the only exception being Program Related Investments - seek financial returns approximating the average risk adjusted returns of similar investments made without regard to sustainability, mission or social considerations.

We evaluate our strategy, processes and tools at least once a year and adjust as necessary. Since this is an evolving field, we anticipate significant changes and innovations in this developing investment market.