Long-standing paradox
It is a long-standing 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.
Addressing myths
The largest 300 endowed charitable foundations in the UK have over £84 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 returns, 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 five areas
Endowments with impact support programme – Supported by the City Bridge Foundation this programme enables foundation leadership – be that an engaged trustee, a CEO or senior manager – to access independent education, guidance and facilitation to explore whether impact investing can and should be a part of a foundation’s strategy and come to an internal collective view. Our support aspires to take foundations from, “should we be delivering impact investing in the endowment?” to an agreed impact investing vision at executive and board level meaningful to the foundation mission, with a clear sense of how to execute. You can learn more about the programme here or reach out to sophia.omar[at]impactinvest.org.uk to hear more.
Practical guides and case studies – Our first practical how-to guide on impact investing, published in February 2022, encourages foundations to deploy impact investing strategies and mobilise more capital for impact. Our newest guide “Evolving your endowment: Driving change through impact investing” draws on real-life experiences to provide a roadmap for foundations to take the practical steps to invest with impact and work with the right advisors to achieve their goals.
Learning – 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. On our Learning Hub module “Impact investing in the main endowment” provides resources such as a selection of impact-enabling investment policy statements (IPS) as well as networks and communities that trusts, foundations, and other endowed bodies may find helpful as they explore impact investing.
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.
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.
