Why Long Term, Strategic Philanthropy Matters
In late May I attended a meeting in Atlanta focused on impact investing hosted by the Federal Reserve Bank of Atlanta, Southeastern Council of Foundations (SECF) and the Council on Foundations (Council) about impact investing. The Federal Reserve Bank of Atlanta’s collaboration with the philanthropic sector is a great example of the value of public philanthropic partnership. Impact Investing is quite familiar to many in philanthropy, but the number of entities actually practicing impact investing is much smaller. Fortunately, that is starting to change. Education and awareness building efforts such as this gathering in Atlanta are important for several reasons.
As mission investing, program related investing, social impact bonds, and other tools become more mainstream, more stakeholders are growing interested. We should welcome that interest but also ensure that all parties fully understand the benefits and pitfalls. For example, two members of Congress have again introduced legislation in this Congress that would “Require the Director of the Office of Management and Budget to publish in the Federal Register a request for proposals from states or local government for social impact partnership projects which produce measurable, clearly defined outcomes that result in social benefit…”
While a very positive signal for the future, we should also recognize the much broader public policy implications. It’s no secret that some in our country are questioning the value of endowed philanthropy. Too often though, critics fail to recognize the value of sustained, longer term philanthropic investment.
Impact investing represents a quite effective manner in which foundations can and have put more of their philanthropic assets to work supporting positive social change. Impact investing can also help bridge the gap between philanthropic innovation and scalable solutions by attracting new resources to help combat social problems.
It’s for these reasons that the Council has stepped up its game to support impact investing including a variety of webinars, resources, and in-person conversations. Through partnerships with organizations like Mission Investors Exchange and others we seek to build more awareness about impact investing, not only for the social benefits it can create, but for the strong case it makes about the value of endowed philanthropy. Without an endowment, foundations would have little if any resources to invest and we would lose out on the long term benefits of a trend that is only now beginning to show its real potential. The Council looks forward to supporting a future in which more foundations use this approach and we will continue to play a significant role championing not only the benefits of impact investing, but that it is made possible because of sustained philanthropic wealth.
Will Heaton is Vice President of Member Relations at the Council on Foundations.
