One of the half dozen trees I’ve planted on my tiny property is already changing colors and dropping a few leaves. The occasional whiff of autumn in the air gives me something of a cozy sweater feel along with that start-of-school knot in my stomach. Ha – nothing like mixed emotions!
So, in honor of my beautiful trees and the knot in my stomach, here are a few back to school supplies for you!
- Andorra’s “Know-What-You-Own” reports have launched many of your journeys into mission aligned investing. They offer a deep dive showing what you actually own. Try one to see how well your investments are matching your missions. We can help subsidize your report. Ask me about that.
- Last month, I shared the annual report of the SK2 Fund, a leader in our space. Here’s another gem of theirs: the SK2 Fund 2022 Impact Report.
- It’s amazingly helpful to have a supporter in this mission aligned journey. Let me help you identify a peer at a foundation the size of yours with whom you can start a conversation and share ideas.
- For laughs always and unabashed commentary on the nonprofit world, subscribed to Vu Le’s blog.
- Some of you let me know that you couldn’t open Clara Miller’s magnificent interview on perpetuity. Here’s a more cooperative version.
Hope all your back to school adventures and memories are positive!
Elizabeth
Featured Paradigm Shifter
Kristina (Tina) Wahl
President of The Barra Foundation
An early adopter of mission alignment
At Work…
What inspired you to align your endowment with your mission? The wisdom and advocacy of Laura McKenna and Elizabeth Killough helped many of us to open our eyes to the possibilities of using the other 95%. Early in my learning, I participated in an impact investing institute held by Mission Investors Exchange (MIE) that helped me to learn what impact investing is and how to get started. While impact investing runs the gamut from below-market rate to market-rate investing, at the MIE institute, I began to understand how foundations can use a portion of their endowment to de-risk and unlock investments from other investors. This “catalytic capital” is defined as investment capital that is patient, risk-tolerant, concessionary and flexible in ways that differ from conventional investment. That ability of foundations to leverage their endowment to spur more investment—and potentially deeper more durable change—really resonated with me.
What have been the biggest opportunities and obstacles at your foundation for mission alignment? For one, we are fortunate that our founder, Robert L. McNeil Jr., always had a focus on innovation, which enables us to support organizations that are testing new or emerging ideas and practices. We take the philosophy to heart and believe that we should “practice what we preach” as a foundation. This mindset has enabled us to venture into impact investing, test, learn and keep iterating. Learning by doing has been key. And, the support of the Board has been critical.
The biggest obstacle for us has been capacity. Our work has been slow but steady. When we started this journey we had three full-time program staff to manage our grantmaking work. Impact investing, particularly if you are engaging in direct below-market rate deals, requires knowledge and resources. We have been lucky to be able to work with knowledgeable impact investing consultants to help us make progress on this journey. We recently added staff capacity to enable us to continue to move this work ahead.
How far along is your foundation in this journey? We made our first two impact investments — one to a CDFI and another direct loan to a for-profit social enterprise — in 2016. Since then we have updated our Investment Policy Statement to carve out up to 15% with an impact lens and we have made good progress toward deploying those dollars. But we still have work to do! You can visit our website to learn more about our current impact investing efforts and progress.
What’s next in your mission alignment? Currently, we are working to see if we can find a way to make it easier for Barra and some of our peer foundations to make below-market rate investments locally. Often these are direct deals that require due diligence that traditional investment consultants are not set up for; or, that might be too early-stage for a CDFI. We are working with a consultant to survey our peers to see where there are opportunities for collaboration; and, to identify other models out there that might be a good fit for Philly. Stay tuned!
What about perpetuity or spending down? We are set up to be in perpetuity. While I have talked a lot about below-market or concessionary capital, that is only a portion of our portfolio. To remain in perpetuity, we need our portfolio to have a combination of below-market and market-rate impact investments as well as ESG or socially responsible investments. See our website to see the impact investing continuum we use in our portfolio.
What’s a favorite mission aligned investment of yours? The direct investments we have made: New Day Chester, Kensington Corridor Trust, Ujima Developers are great examples of how foundation investment dollars can be uniquely catalytic.
Have you ventured into shareholder advocacy? We have not.
What’s the most convincing thing to get others on board? A few things:
Finally, think about impact investing as being additive. Rather than just screening out something like a “sin” stock, how can you proactively invest in things that align might with your mission such as diverse managers, renewable energy, or socially impactful local real estate development?
Read the 2007 LA Times article on the Gates Foundation.
For below-market rate investments, think of the deal as a grant that you might get back, rather than an investment that you might lose.
After Work…
Last series you binge-watched: Bad Sisters
Favorite caffeine source: Coffee
Sweet or salty: Salty
Happy place: Any beach
Currently reading: Trinity by Leon Uris
Childhood ambition: To be Indiana Jones
Adult ambition: To play the guitar
Nickname: I am the youngest of four so I have too many to list here!
Music that lifts your spirits: Whitney Houston
Pet peeve: People who don’t say thank you when you hold the door for them
Last splurge: A trip to Big Sur California (pictured above!)
Mission Aligned Investees
FREe-CARRIAGES, LLC
(and consider joining us in this investment)
Janet White is debuting an answer to horse drawn carriages with her beautiful e-carriage “Caroline” named in honor and memory of Caroline Earle White, founder of the Women’s Animal Center in 1869. As you’ve probably witnessed, despite animal welfare laws, horses are pulling carriages in all weather, all temperatures, and much traffic. Starting in Philadelphia, Janet hopes to blaze a cruelty-free trail for cities around the world to follow. “Caroline” is quiet, elegant, comfortable, and so ready for Cinderella!
