Focus on Impact Investing by Community Foundations

This blog post was originally published by the Initiative for Responsible Investing at Harvard University.

We just launched the Community Foundation Field Guide to Impact Investing in San Diego. As part of that, I got to moderate a session with five of the Guide’s contributors –Stuart Comstock-Gay of the Vermont Community Foundation, Bert Feuss of the Silicon Valley Community Foundation, Kathy Merchant of the Greater Cincinnati Foundation, Ellen Remmer of The Philanthropic Initiative, and Christa Velasquez of the Giving Practice (and formerly a senior fellow with us at the Initiative for Responsible Investment).

The purpose of the panel was to talk about impact investing and trustee engagement – in particular, how foundations can develop mission investing strategies, and the resources and governance structures to make sure they are put into practice effectively. This was a sharp group of people on the panel, and they dealt with the practical challenges of impact investing at the same time they captured the excitement for boards of building expertise in a new field.

We talked about assessing mission fit and risk appetite (and, said one panelist, that’s almost the whole mission investing discussion right there), building pipelines of investment opportunities in geographically limited spaces, what community foundations can do to build impact investing capacity beyond themselves, the advantages of growing mission investing programs over time, and so on – a conversation that grew out of the work in the Field Guide. We also talked about goat farms and beef jerky. It was a fun hour and a half.

I was especially pleased with the engagement from the 80 or so people in attendance, many of them foundation trustees themselves, and, as it seemed from the questions, many of them actively developing or designing impact investing strategies. I had to put aside half of my prepared questions for the panel because the audience kept asking their own – and their questions tackled hard issues and focused on what community foundations can bring to the broader impact investing table. The Council on Foundations labeled this an advanced mission investing discussion (“impact investing 201”) and it was. It felt like a field taking hold.

I will say more about this later, but for now, I’d also like to flag the recent publication by USSIF: the Forum for Sustainable and Responsible Investment of “Expanding the Market for Community Investment in the United States,” a report on which we at the IRI and the Milken Institute collaborated. The report explores how new sources of capital might be brought into community investment, and the sorts of products and sectors that may be channels for that to happen.

David Wood is the director of the Initiative for Responsible Investing at Harvard University.