Steve Godeke, Principal of Godeke Consulting, and Doug Bauer, Senior Vice President of Rockefeller Philanthropy Advisors, define Mission Related Investing (MRI) as ‘any investment activity which seeks to generate a positive social or environmental impact in addition to providing a financial return’. They assert that MRI ‘is an idea and a force whose time has come in the field of philanthropy’ enabling foundations to ‘unleash more of their resources to achieve positive impacts that change communities and societies’.

The title of this guide, Philanthropy’s Passing Gear, is derived from an essay written in 1989 by Paul Ylvisaker, previously at the Ford Foundation, who described philanthropy as ‘society’s passing gear’ in that philanthropic resources can be used to fund and to accelerate new ideas that can achieve lasting social change.

Advocates of MRI are well used to encountering resistance from among investment advisers, investment managers and members of foundation investment committees: ‘that’s all about social funding – it’s not about investment; go talk to the grants and programme people’, and/or ‘what you are proposing will increase risk and reduce return – we must avoid both’.

But times are changing. Increasingly, the response of foundation trustees and staff is more positively curious: ‘we can see a potential “win-win” here, but is it just rhetoric? Show us some real investment possibilities and, maybe, we can talk.’ This guide will help meet that curiosity. Using some excellent case studies from among foundations of all sizes, the co-authors rehearse comprehensively the arguments for MRI and spell out how a foundation can in practice move from idea to execution across the MRI spectrum including Programme Related Investment, Screening, Investor Activism, Guarantees, and Market Rate Investments. Their ambition is formidable – to cover so much and to support it all with practical and current examples. There are also some very useful template and sample documents in the Appendices.

Not all the topics are addressed in the same depth; the content of the section on what is probably the most challenging issue, Market Rate Investments, for example, is rather thin. The guide is, however, a timely and valuable addition to the growing ‘literature’ (as set out in the extensive bibliography in the appendices) and will, I hope, be regularly updated as more and more successful MRI initiatives are implemented. The focus is on US foundations, but much of the content and the case studies will be of use and encouragement to foundations across the world who want to put some of their endowment, their capital funds, to work to serve their charitable mission.

David Carrington is an independent consultant specializing in philanthropy and social investment. Email davidcarrington@btinternet.com

Philanthropy’s Passing Gear: Mission-Related Investing – A policy and implementation guide for foundation trustees
Steve Godeke with Doug Bauer
Rockefeller Philanthropy Advisors

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