« View All Blog Posts

Foundations Connecting Money and Mission
By Michael Schweibinz

Foundations serve a unique purpose and the hundreds of billions of dollars in investment assets they own represent a powerful force for good. Yet in many cases, there is an inconsistency akin to cognitive dissonance between an organization’s investment strategy and its mission.

First Affirmative hosted a breakout session during the 25th annual SRI Conference that focused on this topic. It found its way onto the conference agenda to help advisors understand the issues that foundations wrestle with when considering aligning investment strategies with their values. Foundation veterans, John Powers, Floyd Keene, and Lucy Cantwell, lead an interactive conversation with an audience comprised primarily of licensed investment professionals.

The panel sent a strong message to the audience: Advisors need to communicate with their clients to understand what the client is hoping to achieve by investing for positive impact. “Impact investing” is a broad term, and the definition varies from person to person, and from foundation to foundation. To fulfill one’s fiduciary duty, advisors need to gain a deep understanding of the foundation’s financial goals, values, and mission before making any investment recommendations.

John Powers, founder of the non-profit Alliance for Sustainable Colorado, and long-time board member of a number of private foundations, emphasized the idea that “fulfilling your fiduciary duty does not always mean maximizing return.” In fact, foundations exist as legal entities precisely because they have a mission or purpose above and beyond generating impressive investment returns.

“Proper communication helps advisors understand if their client cares more about impact or return. This determines how they want their impact investment to be directed,” according to Cantwell.

To hear more, you can tune in to the audio recording of this session.

 

At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impactour money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions? Learn more about Investing with First Affirmative.

Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.

Posted: January 14, 2015