Who is this guide for?
This guide is designed for charitable foundations who want to align their investable assets for impact. It is for foundations who want to evolve their main endowment investments to deliver positive social and environmental impacts alongside financial return to support the foundation’s charitable activities.
Historically, most foundations have focused on delivering positive impact through their grant-making, typically accounting for a small proportion of their total assets.
If foundations all over the world started to deploy impact investing in their mainstream investment approach, it could unlock billions globally to address the world’s most pressing challenges.
What does the guide cover?
Drawing on real-life experiences and case studies, this guide starts from the point at which there is agreement to deliver impact investing at the Board and Executive level, but that broad direction has yet to be enacted in practice. The guide provides practical steps, questions and resources on the following:
Laying the groundwork and setting the impact strategy
Set the strategy:
- Consider how your foundation might resource the shift into impact investing.
- Explore how your mission can be translated into an impact investing strategy and how this can be codified in a ‘theory of change’.
- Look at different models for transitioning your portfolio to an impact strategy – from a carve-out to 100% impact.
Codifying your goals and approach
Writing an impact-enabling investment policy statement (IPS): Discover why an IPS is important to formalise impact intent, maintain consistency of approach in all market conditions and ensure clarity and accountability for all professionals involved. Consider, step-by-step, what to include in the IPS.
Working with external investment partners
Choosing the right partners: Ask questions to determine if you are working with the right firm to achieve your aims, if your relationship is being managed by the right team in an organisation, and if the products offered fit with your impact strategy.
Managing relationships: See how to foster a productive, trusting ongoing relationship with your chosen advisers and managers – from onboarding an impact strategy to sharing opportunities to reporting on performance.
Continuous learning and collaboration
Discover the peer networks, impact organisations and educational resources to help inform, support, and inspire you and your organisation on your impact journey as part of the guide as well as our Learning Hub module “Impact investing in the main endowment.”
We welcome feedback on the guide and further cases studies of best practice of endowments investing with impact. You can reach out to us directly at partnerships(at)impactinvest.org.uk