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Three easy steps to impact investing for a foundation or not-for-profit organisation

If you work for a philanthropic foundation, or a not for profit, there is a good chance it has an investment portfolio. It’s often called an endowment or a corpus. It might be there to generate income that helps fund your organisation’s work, or it might be there in case of a rainy day. But in any case, how it’s invested is interesting.

If the question ever comes up, most people working in a purpose-driven organisation would prefer that the money isn’t working against the organisation’s fundamental mission.

Would you care if your endowment was providing financial support to companies selling tobacco products, building new coal mines, employing child labour or manufacturing weapons? It happens, for sure. You might be surprised to learn what your organisation’s money is invested in. Would you prefer your organisation was using all of its resources to support outcomes that are good for people and the planet? Let’s talk about three steps you could take to make it happen.

Step 1 – Make sure you’re not investing in bad s*@t

The easiest first step is to stop doing bad and dumb things. Bad and dumb are subjective, but if you work in humanitarian aid, then having investments in weapons is probably both bad and dumb. If you work for an organisation with an environmental mission, but it owns shares in a coal miner you probably have cause to be a little ticked off about this.

Step 2 – Go from eliminating the bad to finding the good

So, in step one we have done our best to remove any negative impacts from the portfolio. Next, find investment options that can support positive social or environmental outcomes, on top of what your organisation does in-house. That’s impact investing.

Step 3 – Go all the way to mission alignment

For the most advanced, there remains one last step which is to find investments that are not just generally positive but contribute specifically towards your organisation’s mission.

To view the ProBono article in full, click here

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