Connection Between Endowment Investments and Values
Nonprofit endowments, invested primarily in the stock market, provide charitable foundations with financial returns that they use to pursue philanthropic missions. However, foundations don’t necessarily align their asset management with their charitable activities. In early January, the Los Angeles Times published an investigative report detailing perceived contradictions between the mission and the investments of the Bill and Melinda Gates Foundation, the world’s largest. This series of articles ignited a heated debate about socially responsible investing (SRI) in the area of endowments that has continued for months.
In response, the SRI industry has stepped up its focus to demonstrate the opportunities available to foundations in aligning their mission and investments. The Social Investment Forum, the social investment industry’s trade association, has published a booklet on the subject titled: The Mission in the Marketplace: How Responsible Investing Can Strengthen the Fiduciary Oversight of Foundation Endowments and Enhance Philanthropic Missions. MMA and the MMA Praxis Mutual Funds have been active in lifting up this conversation, particularly among faith-based charities and institutions. We believe that there doesn’t have to be a wall between the investments and mission of foundations. The following is a piece I wrote titled A Third Way for the Gates Foundation.
