A SOCAP Guest Post by Matt Onek, CEO, Mission Investors Exchange
Mission Investors Exchange, the leading network of foundations engaged in impact investing, was honored to be one of five Guest Curators at SOCAP17, where we developed a series of sessions offering a window into the innovative ways that philanthropy is putting more capital than ever to work for our communities.
Our “Mission Possible” track shared our foundation members’ innovative impact investing strategies and explored how others can partner with foundations to increase the impact and scale of their work. It also highlighted how foundations are bringing their unique leadership voices to the impact investing dialogue—voices that are critical to the future success of the field.
Below are our top four takeaways from foundation leaders innovating in this space.
1. Foundations are dedicating more of their endowments directly to mission.
Foundations are building a new paradigm for philanthropy that aligns more assets from their portfolios with mission. Surdna Foundation shared its decision to allocate $100 million towards impact investing from its endowment, while Heron Foundation has successfully moved 100% of its portfolio into investments that are aligned for mission. Meanwhile, Lumina Foundation began a venture capital division to channel endowment funds into innovative social enterprises. Although every organization’s strategy is different—from making direct investments into projects, to participating in socially responsible funds—foundations are setting and meeting ambitious goals for deepening the impact of their capital.
Watch the panel’s dialogue on innovative investing, featuring: Jamie Merisotis, CEO, Lumina Foundation; Tracy Palandjian, Trustee, Surdna Foundation; Kelly Ryan, CEO, Incourage; and Debra Schwartz, Managing Director of Impact Investments, MacArthur Foundation.
2. Foundations are relentlessly championing impact.
Impact investing has become a popular catchphrase, inspiring investors and investees around the world to re-imagine their work through the lens of social and environmental change.
But how do we constantly push our standards for making a meaningful difference in the world? And “what is the impact?” asked Jamie Merisotis, CEO of Lumina Foundation. “Are we going to bend the curve on equity? Are we going to increase prosperity in American society through talent?” Foundations play a critical role in keeping the “impact” in impact investing—as investors and through their leadership voice in the field.
3. Foundations are often willing to take on greater risk, unlocking additional capital in the process.
Foundations can provide capital to help “de-risk” projects, ultimately opening the door for investors that would not have otherwise walked through. In discussing how this market context drives strategy, Debra Schwartz, Managing Director of Impact Investments at MacArthur Foundation, described the Foundation’s “ruthless” commitment to “additionality”: “We want to do transactions where ‘but-for’ the foundation’s engagement, the transaction, the innovation, the scale would not have been possible.” In this way, foundations can help catalyze whole markets, where traditional investments eventually flourish.
Remarks in the opening plenary also highlighted this theme and featured: Emmett Carson, CEO, Silicon Valley Community Foundation; Clara Miller, CEO, Heron Foundation; and Matt Onek, CEO, Mission Investors Exchange.
4. Foundations are investing in communities and helping to build broader place-based ecosystems.
Foundations find themselves at nexuses, with the capacity to foster organic collaboration among diverse stakeholders—investors, investees, policymakers, and others who care deeply about solving the social and environmental challenges of our time. This approach shines brightest in place-based impact investing initiatives, in which a local ecosystem of stakeholders work together to steward change in their community or region. “It really begins and ends with the people that call a place home,” said Kelly Ryan, CEO of Incourage, in describing the community foundation’s deeply place-based approach to investing.
Mission Investors Exchange’s additional session highlighting stories of place-based impact investing featured: Melanie Audette, Senior Vice President, Mission Investors Exchange; Susan Hammel, Executive in Residence, Minnesota Council on Foundations; Cynthia Muller, Program and Portfolio Officer, Mission Driven Investments, W.K. Kellogg Foundation; and William R. Towns, Executive Director, Benefit Chicago.
Foundations and other mission-driven investors have taken on the challenges of the 21st century, innovating in creative ways. As they develop new organizational infrastructure and paradigms for delivering on mission, they are also serving as thought partners for other impact investors, committing to a practice of transparency that helps accelerate learning for the field as a whole.
Together, we believe their innovation will play a critical role in building a more equitable economy and sustainable environment.