Our experience has shown us that foundations have struggled with the issues raised within Andrew Milner’s article on foundation investments ‘What happens to the rest of it? How foundations make investments’.
The limits presented by negative screening, and how to align a foundation’s vision or mission with investment operations as well as granting operations, engaging with managers who have the credentials and experience to match mission related investment (MRI) with the foundation’s investment screening criteria.
Most importantly, small foundations in particular struggle with defining what MRI or Environmental, Social and Governance (ESG) issues mean to their organization and from there, giving life to and supporting their values and beliefs through MRI or ESG investing. Too often, foundations are crammed into a manager’s fund that represents every conceivable ESG consideration in order for the manager to capture as many clients as possible.
This in turn becomes an asset gathering exercise rather than a solution that exactly meets the client’s needs. Those types of investments may not further the foundation’s mission nor correlate to the foundation’s core values.