October 30, 2009
Foundations Project That Mission Investing Will Have Increased in 2009
by Robert Kropp
Survey undertaken by More for Mission finds that mission investing by foundations continues despite
effects of economic downturn, but that few respondents exercise shareowner advocacy.
Mission investing is a form of socially responsible investing (SRI) practiced by foundations, by
which they seek to align their investments with their mission. According to the Foundation Center, assets of US foundations totaled
over $530 billion by year-end 2008.
More for Mission, a network of 58 foundations
representing $30 billion in total assets, defines mission investing by foundations as having two
primary components. Mission-Related Investments (MRIs) support the mission of the foundation by
seeking financial returns similar to conventional investments. Program-Related Investments (PRIs)
further a foundation's tax-exempt activities by investing in nonprofits or commercial ventures for
charitable purposes, while targeting returns that are typically lower than the market-rate average.
Typically, mission investments have focused on the issue areas of economic development,
housing, education, and the environment. According to FSG Social Impact Advisors, 85% of all mission investment
dollars invested from 2001 to 2005 focused on these areas.
A recent survey by More
for Mission, of 39 foundations across a range of foundation types, sought to quantify the amount of
assets respondents have in mission-related investments, as well as whether the economic downturn
has affected the mission investing of foundations. The Foundation Center found that year-end 2008
assets of foundations had declined by 21.9% since 2007.
The respondents to the survey
reported that 4.7% of their assets were dedicated to mission investing at year-end 2008, and
projected that the amount would grow to 6.9% by year-end 2009. Despite the impact of the economic
downturn on the total assets of foundations, 25% of respondents stated that they had actually
increased their mission-related investments as a result of the downturn, while 60% reported that it
had no effect.
While More for Mission considers shareowner advocacy to be an important
part of mission investing, 70% of respondents reported that they neither file shareowner
resolutions nor take part in proxy voting. The foundations that did report exercising their
responsibilities as shareowners focused on such issues as environmental, social, and governance
(ESG) initiatives, Darfur divestment, educational initiatives, sustainability reporting, and
Some foundations reported using such proxy advisory firms as RiskMetrics Group, and some voted in
accordance with the recommendations of the Interfaith Center on Corporate Responsibility (ICCR).
Hagerman, Director of More for Mission, said, "Interest in mission investing in the broader
foundation community continues to grow as evidenced by the growth of our network which has more
than doubled over the past year."
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