How The Russell Family Foundation Moved Almost Entirely Into Impact

For social entrepreneurs seeking financing, one notable trend is the movement for foundations to go all in or thereabouts. That means a small, but growing, number of philanthropic organizations are moving most, or all, of their money into impact-related investments.

Now, The Russell Family Foundation, one such foundation, just came out with a report outlining its four-year effort to move from 7% to almost 75% mission-aligned investments, with financial returns that beat market benchmarks by nearly 3%, according to CEO Richard Woo.

The foundation focuses on environmental protection and local community empowerment in the Pacific Northwest and Puget Sound.

Their efforts started in 2004, with a $1 million carve-out from the endowment to learn about what would soon be called impact investing and a series of mission-aligned investments. Then, the organization created what it called its Mission Related Investment Committee (MRIC), bringing together program staff and investment advisors to coordinate efforts. Several years of analysis followed, conducted by a financial advisory firm and, eventually, the foundation created a menu of investment approaches. The upshot: It achieved nearly 75% mission-aligned investments in four years.

 

The investment approach rests on five levels of impact. First is negative screening. Second is tilting toward positive screens—say, not just eliminating fossil fuels, but taking on more clean energy. Third is integrating ESG factors, making sure that, for example, the foundation doesn’t inadvertently increase investments in ways that raise its carbon footprint.

The last two involve more complexity. The fourth is all about themes—looking for investments that align with philanthropic goals, like sustainable forestry, affordable housing or other place-based investing. Example: Forterra Strong Communities Fund in Seattle, focused on methods to buy land and work with local communities to create affordable housing.

courtesy: https://www.forbes.com/sites/annefield/2018/10/31/how-the-russell-family-foundation-moved-almost-entirely-into-impact/#39e86a7646e5

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