It is a longstanding paradox that foundations give grants to achieve specific social or environmental objectives – yet their endowments are often not invested with those same objectives in mind.
The largest 300 endowed charitable foundations in the UK have over £72 billion in total assets. The bulk of this is invested in mainstream capital markets without consideration of how it might generate environmental or social benefits.
A few organisations are seeking to deliver positive impact through their investment portfolios. But wider adoption has been deterred by the ongoing perception that impact investing involves lower financial return, can be complex to deliver, or lacks suitable investments.
We work with multiple stakeholders across the endowments sector, including membership bodies and associations, endowed charities, investment consultants, and legal experts, to address common myths about impact investing and provide practical tools to help more endowments invest with impact.
Our work focuses on four areas
Fiduciary duties – Our paper ‘Can Charities invest their Endowment with impact?’, produced in partnership with specialist charity lawyers, demonstrates the compatibility of impact investing with the legal obligation on trustees to advance their organisation’s charitable purposes.
Practical guides and case studies – Our practical how-to guide on impact investing encourages foundations to deploy impact investing strategies and mobilise more capital for impact. We are also working on a guide and case studies to empower investment consultants to advise endowments on how they can align their investments to have a positive impact on people and the environment.
Learning programme – We are designing and delivering a learning programme in partnership with the Association of Charitable Foundations to up-skill foundation leaders on developing an impact investing strategy for endowments.
Facilitating conversation – We have created a downloadable presentation to help facilitate conversations about impact investing within charitable foundations. It provides an introduction to impact investing, busts prevalent myths, highlights key arguments in favour of the approach and provides steps on how to get started, all supported by detailed speaker notes.