Business Commons^™

Impact Management Discipline: The Key To Effective Impact Investing And Grantmaking, Sarah Gelfand, Carli Roth, Mya Stanislas, Alexandra Zoueva

The Foundation Review

Foundations have a long history of putting impact at the center of their decision-making when allocating resources for grantmaking. Effective grantmaking follows clear processes that have similarities to the best practices employed by the impact investing community for effectively deploying and managing an impact investing portfolio. This is exemplified by the Operating Principles for Impact Management, a leading market standard for how to integrate impact considerations throughout the investment life cycle.

As a growing number of foundations embrace impact investing, understanding and comparing the impact management approach for grants (where it is enabled through monitoring, evaluation, and learning) versus that …

The Field-Building And Grantee Experimentation Role Of Foundations In Impact Investing As Illustrated By A Gender-Lens Investing Case Example, Courtney Bolinson, Laura Allan

The Foundation Review

This article argues for foundations to play two critical roles in the impact investing ecosystem: to commission and/or support research that helps build more equitable and socially just impact investing and to fund grantee-specific experimentation in areas of impact investing and social enterprise that are nascent or developing.

To illustrate what this can look like, this article presents action research conducted on gender-lens investing, describing in detail a 2019 Mastercard Foundation grant to Engineers Without Borders Canada. The project involved two main goals: testing and developing gender-lens investing tools and processes with seed-stage investees during pre- or post-investment phases and …

The Ford Foundation’S Work To Build The Field Of Impact Investing, Margot Brandenburg, Abeda Iqbal

The Foundation Review

Impact investing has grown dramatically over the past 15 years, with foundations playing a critical role through their program-related and, increasingly, mission-related investments. A smaller number, including the Ford Foundation, have dedicated grant and other programmatic resources toward growing the field. Without this funding, the metrics, engagement, policies, and norms needed to underpin capital markets at scale will be slow to materialize.

This article looks back at the long history of aligning financial investments with social values; touches on the Ford Foundation’s pioneering role in the emergence of PRIs as a tool to stretch grantmaking budgets; and details the impact …

Donor-Advised Funds And Impact Investing: A Practitioner’S View, Sam Marks

The Foundation Review

Any discussion of foundations embracing impact investing must include some discussion of one of the largest — and growing — sources of philanthropic capital: donor-advised funds. These philanthropic accounts allow donors of all sizes to access many of the functions of a private foundation, including the potential to invest for impact. Sponsors of these funds, however, face unique challenges in catalyzing impact investments.

Like the larger institutional foundations that have led the way as mission investors, sponsors must often educate and inspire governance boards and investment committees. Unlike foundations with professional program staff, decisions regarding philanthropic resources at sponsors of …

Using Foundation Capital For Good: Opportunities In The Balance Sheet, John Sherman, Veronica Olazabal

The Foundation Review

Foundations increasingly use their full balance sheets to unlock more of their capital for good. They look beyond conventional grantmaking to pursue their charitable purposes in many ways that exemplify innovative, full-balance sheet approaches: investing in nonprofit and for-profit companies that offer clear social and financial returns; investing their corpus in companies whose products and services align with their missions; using social bonds to inject new resources into their programs; offering guarantees to help grantees manage risk; and avoiding companies whose practices run counter to their grantees’ efforts.

This article looks at the structures, pathways, and tools for foundations wanting …

Leveraging Foundation Balance Sheets For Greater Impact: Piloting A Pooled Guarantee Program, Jane Reisman, Jim Baek, David Newsome, Christine Ryan

The Foundation Review

A guarantee instrument is a credit enhancement tool that can enable philanthropies to unlock millions or billions of dollars for societal impact. The Community Investment Guarantee Pool, created in 2019 by a collaboration of philanthropies and allied impact investors, or guarantors, is a novel initiative that uses guarantees to leverage the balance sheets of foundations and other institutional investors for enhancing the credit of intermediaries in the affordable housing, small-business, and climate markets. As the guarantees are unfunded, foundations continue to keep their endowment invested in the conventional market.

This article describes the Community Investment Guarantee Pool, details its theory …

Laying The Groundwork For A National Impact Investing Marketplace, Stephanie L. Gripne, Joanne Kelley, Kathy Merchant

The Foundation Review

The practice of impact investing is rapidly gaining momentum, but the level of activity among individual and institutional investors, including philanthropists and foundations, has barely penetrated projections of market potential.

The marketplace that should connect impact investors with investees or social ventures does not function effectively.

Developing cost-effective ways to engage new investors and break down barriers to investment is an essential part of growing the industry.

Developing cost-effective ways to “prime the pump” for social ventures to become investor-ready — through a capacity-building process that includes outreach, education, and technical assistance — is an essential part of growing the …

Partnering For Impact: Developing The Mcknight Foundation’S Carbon Efficiency Strategy, Gayle Peterson

The Foundation Review

This case study challenges us to redefine our definitions of community and philanthropic practice as we tackle global climate change — one of the most Wicked Problems facing our planet and our people. Driven by a deep commitment to “walk the talk,” CEO Kate Wolford and McKnight Foundation leadership committed $100M of the foundation’s endowment to find solutions to global warming. This bold step required building a new type of partnership with McKnight’s team of financial advisors — Mellon Capital Management, Mercer, and Imprint Capital (now Goldman Sachs). McKnight and Mellon Capital had to build a new cross sector partnership …

Going Beyond Grantmaking: Using External Help To Extend A Foundation’S Core Competencies And Increase Its Impact, Gwen Walden,, Lauren Marra, Katrina Briddell

The Foundation Review

The drive to achieve impact beyond grantmaking represents a paradigm shift in the way foundations seek to make social change. By bringing to bear new resources and thinking, this shift has the potential to amplify the impact of the philanthropic sector. Consultants and other intermediaries have critical roles to play in extending and enhancing this impact.

This article explores the opportunities and challenges inherent in foundations’ efforts to go beyond grantmaking and examines how they can – and cannot – effectively use consultants and other intermediaries to enhance such efforts. It presents three cases: incubating and launching a new organization, …

Impact Investing: A 21st Century Tool To Attract And Retain Donors, Amy L. Cheney, Kathryn E. Merchant, Robert Killins Jr.

The Foundation Review

· A familiar private foundation tool is being used by the Greater Cincinnati Foundation as a way to engage donor advisors to make a positive difference in the community.

· While due diligence and risk management of the financial return for these investments is crucial, the social return to be achieved is the primary consideration.

· Donors can achieve a modest financial return, which is recycled into their donor-advised fund, by investing locally in projects that make a significant difference.

· Initial donor interest in participating in impact investing has been strong and provided valuable insight into program design.

· …