Oct
30

More Foundations Using Investment Assets to Achieve Their Missions

This is pretty interesting news for all of you out there with missions that have no funding sources- yet. All we need to do now is find out which foundations have missions clearly inline with our own…

What does the term Mission Investing mean? A growing group of foundations are increasingly thinking about their organizations as stewards of resources that can be applied to address some of the most challenging problems of their unique missions and program areas. The field of mission investing (MI) is making significant strides. Mission investing is another way for foundations to effect transformational change by using their long-term patient capital to invest in under-served markets.

“More Foundations Use Investment Assets to Achieve Their Missions.” Foundation Center Press Release 10/26/11. 

The number of community and private foundations using their investment portfolios to help achieve a social benefit is growing, a new report from the Foundation Center finds.

According to Key Facts on Mission Investing (see link below, 4 page PDF), which benchmarks for the first time foundations’ engagement with mission-related investment, one in seven of the foundations surveyed for the report are directing their assets to market-rate mission-related investments or below-market-rate program-related investments (PRIs). The report also finds that more than half the foundations making mission-related investments started doing so within the past five years, while 28 percent started to do so within the past two years.

By investing endowment funds with an eye to advancing their missions, these grantmakers — which together hold some 20 percent of all U.S. foundation assets — are extending the public benefit of their financial resources, the report argues. While all foundations are allowed by law to make PRIs, which generally yield below-market-rate returns and count toward a foundation’s charitable distribution requirement, market-rate investments that support a foundation’s programmatic goals do not count toward the distribution requirement.

In 2010, private foundations in the U.S. awarded approximately $46 billion in grants, while their assets totaled more than $600 billion. “Foundations are striving for greater impact,” said Steven Lawrence, the Foundation Center’s director of research and principal author of the report. “Mission investing puts foundation asset dollars to work in ways that have the potential to go far beyond the social impact of their grantmaking dollars.”

Click Here to Read a 2011 Keyfacts Report on Mission Investing

 

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