Benefiting from Mission-related Investing
posted on: Wednesday, April 09, 2008
By Meredith Brodbeck, Communications/Development Assistant, NCRP
In Compounding Impact: Mission Investing by US Foundations, the Foundation Strategy Group (FSG) explores three approaches to mission-related investing (MRI), one of which is shareholder advocacy and proxy voting. The report defines this as a foundation using “its investments as a means to engage in shareholder advocacy – through dialogue with corporate management, shareholder resolutions, and proxy voting – to influence a corporation’s behavior on issues relevant to the foundation’s mission.”
Recently, a number of foundation leaders encouraged their peers to exercise shareholder powers during the 2008 proxy season to help ensure that companies act responsibly toward climate change and global warming.
The Investor Network on Climate Risk (INCR) announced the filing of 54 global warming shareholder resolutions with U.S. companies that are facing extensive business impact due to climate change. Furthermore, the number of resolutions is nearly double what it was two years ago, and 14 of the 54 resolutions are already seeing results.
INCR as an organization is also seeing results; their membership has grown from 10 investors managing $600 billion in assets to 60 investors managing $5 trillion in assets.
According to Dave Beckwith of The Needmor Fund, value-based investing can be financially rewarding. “Through careful construction of investment policies and selection of consultants, managers or investment vehicles, it’s possible for foundations to do less harm and more good while growing their financial assets,” Beckwith says in an article for the summer 2007 issue of NCRP’s Responsive Philanthropy.
In analyzing the financial performance of mission-related investments, those done through loans provided the most data due to their popularity. FSG was able to conclude that, “of the 653 loans in our study, 85% were fully repaid.”
Clearly, it is possible for foundations to have a strong investment portfolio that aligns with their mission and values. So why aren’t there more foundations involved in MRI? Is this simply a case of old habits dying hard? Or perhaps foundation trustees are just doubtful? What do you think needs to be done for more foundations (and other organizations) to take the MRI plunge?Labels: Mission-related investing
In Compounding Impact: Mission Investing by US Foundations, the Foundation Strategy Group (FSG) explores three approaches to mission-related investing (MRI), one of which is shareholder advocacy and proxy voting. The report defines this as a foundation using “its investments as a means to engage in shareholder advocacy – through dialogue with corporate management, shareholder resolutions, and proxy voting – to influence a corporation’s behavior on issues relevant to the foundation’s mission.”
Recently, a number of foundation leaders encouraged their peers to exercise shareholder powers during the 2008 proxy season to help ensure that companies act responsibly toward climate change and global warming.
The Investor Network on Climate Risk (INCR) announced the filing of 54 global warming shareholder resolutions with U.S. companies that are facing extensive business impact due to climate change. Furthermore, the number of resolutions is nearly double what it was two years ago, and 14 of the 54 resolutions are already seeing results.
INCR as an organization is also seeing results; their membership has grown from 10 investors managing $600 billion in assets to 60 investors managing $5 trillion in assets.
According to Dave Beckwith of The Needmor Fund, value-based investing can be financially rewarding. “Through careful construction of investment policies and selection of consultants, managers or investment vehicles, it’s possible for foundations to do less harm and more good while growing their financial assets,” Beckwith says in an article for the summer 2007 issue of NCRP’s Responsive Philanthropy.
In analyzing the financial performance of mission-related investments, those done through loans provided the most data due to their popularity. FSG was able to conclude that, “of the 653 loans in our study, 85% were fully repaid.”
Clearly, it is possible for foundations to have a strong investment portfolio that aligns with their mission and values. So why aren’t there more foundations involved in MRI? Is this simply a case of old habits dying hard? Or perhaps foundation trustees are just doubtful? What do you think needs to be done for more foundations (and other organizations) to take the MRI plunge?
Labels: Mission-related investing
posted by NCRP at
3:02 PM
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