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17 posts from June 2017

Most Popular PhilanTopic Posts (May 2017)

June 02, 2017

Like many of you, we're trying to make sense of all the tweets, charges/counter-charges, and executive orders emanating from the White House. One thing we do know, however: you found plenty to like here on the blog in May, including a stirring call to action from Tim Delaney, president of the National Council of Nonprofits; some excellent grantmaking advice from Peter Sloane, chair and CEO of the Heckscher Foundation for Children; a new post by everyone's favorite millennial fundraising expert, Derrick Feldmann; posts by first-time contributors Nona Evans and Jaylene Howard; and an oldie-but-goodie by fundraising consultant Richard Brewster. But don't take our word for it โ€” pull up a chair, click off MSNBC, and treat yourself to some good reads!

What have you read/watched/heard lately that got your attention, made you think, or charged you up? Feel free to share with our readers in the comments section below. Or drop us a line at mfn@foundationcenter.org.

Xavier de Souza Briggs, Vice President, Economic Opportunity and Markets, Ford Foundation: Changing the World Through Mission-Related Investing

June 01, 2017

In April, Darren Walker, president of the Ford Foundation, the second largest foundation in the United States and one of the most influential in the world, announced a billion-dollar commitment over the next decade to mission-related investments (MRIs). In making the announcement, Walker expressed a belief widely shared within his organization that "MRIs have the potential to become the next great innovation for advancing social good." Walker further suggested that foundations needed to expand their imaginations and tools if they hoped to successfully address "the large-scale problems facing the world today" and added that they shouldn't "neglect the tremendous power of markets, including the capital markets, to contribute."

Ford isn't the first foundation to commit itself in a significant way to mission-related investing, although its commitment would appear to be the largest by a foundation to date. Since the late 1990s, the F.B. Heron Foundation in New York City has distinguished itself as a pioneer in the field, and under the leadership of its president, Clara Miller, has become increasingly willing to challenge others "to jettison outdated operating models that leave resources untapped in the face of systemic social ills." Foundations such as Kresge, Packard, and Surdna have followed suit.

Shortly after Walker's announcement, PND spoke with Xavier de Souza Briggs, vice president for economic opportunity and markets at the Ford Foundation, about the foundation's decision, how and where the funds will be allocated, and what the move means for the field of impact investing.

De Souza Briggs joined the foundation from the Massachusetts Institute of Technology, where he was a professor of sociology and urban planning in the Department of Urban Studies and Planning. An award-winning author, commentator, and educator, he served from January 2009 to August 2011 as associate director of the Office of Management and Budget in the Obama White House. His most recent book, Moving to Opportunity: The Story of an American Experiment to Fight Ghetto Poverty, was published by Oxford University Press in 2010.

Headshot_xavier-de-souza-briggs_220Philanthropy News Digest: Let's start with a question I'm sure many of our readers are asking.What are mission-related investments?

Xavier de Souza Briggs: MRIs are investments that pursue both attractive financial returns and social impact, also known as social returns, and they are made from a foundation's endowment, rather than counted against its program payout. That's the IRS definition, not ours, and private foundations have been making them for a while, albeit not on the scale of a billion dollars.

PND: Why did Ford decide that this was the right time to allocate a billion dollars to MRIs?

XSB: Well, first of all, we felt it was important, at this particular moment, to align as many of our assets as possible with our mission. That includes our grantmaking, of course, and our program-related investments, which, again as defined by the IRS, is the other kind of impact investment that foundations can make. Our building in Manhattan, where we've convened changemakers and social sector leaders for many years, is an important asset, too. But we've never made investments toward our mission out of our endowment, and we felt that, at this moment, the impact investment market was ready for us to take this step. And the board agreed, which is why it approved MRIs of up to a billion dollars over ten years. Now, we're going to be careful and gradual about how we put those funds to work, but we're quite excited about the opportunity.

PND: Did the board have any reservations?

XSB: The board had a set of smart questions. Are the investable opportunities really there? Are we confident that we can generate social return in addition to financial return, which is better understood and more easily measured? They were good, smart questions, and the board was very prudent in its approach to oversight. But ultimately it concluded, based on the foundation's many years of experience with impact investing, that we were ready and the market was ready, and that by stepping up now we could help catalyze a broader movement in the impact investing field, which includes not only foundations but other major institutional investors such as pension funds, sovereign wealth funds, and university endowments. That's where the really big pools of investable capital are, and that's where the larger promise lies.

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