New Report Provides Insider Playbook to Unlocking Endowment Investments that Align with Mission and Generate Profits

Builders Initiative and Social Finance release joint findings featuring interviews with 30 national philanthropic and impact investment leaders

Boston and Chicago—Builders Initiative and Social Finance today released a new report, “Breaking Barriers:A Practical Guide to Unlocking Foundation Endowments for Mission and Returns.” Written for leaders of foundations, high-net-worth family offices, and their board members, the report identifies common barriers and opportunities associated with mission-related investments (MRIs). MRIs are impact oriented, often market-rate, investments made from a foundation’s endowment to advance its mission.

Builders Initiative—the philanthropic team of Builders Vision which supports those building a more humane and healthy planet through investment, philanthropy and advocacy—engaged Social Finance, a national impact investing nonprofit, to conduct interviews with 30 philanthropic and impact investing leaders who collectively help manage more than $300 billion in assets. This is one of several learning initiatives Builders Initiative is pursuing as part of its strategy to expand impact investing.

Written with practitioners in mind, the report highlights many concrete real-world examples, from philanthropic leaders reimagining their organizational structures to those proving MRI returns through carve-outs and side-by-side comparisons with traditional investments.

“This report shares insights and strategies from leading impact investors, ultimately laying out a roadmap with concrete, actionable strategies for philanthropies to better align their endowment assets with their mission while creating certainty that endowment assets can have purpose and profit,” said Bruce McNamer, President of Builders Initiative. “We are excited to share these findings with other mission-driven and mission-curious investors in hopes that others will pursue more impact investing.”

Private foundations in the U.S. hold more than $1.1 trillion in assets, while family offices hold as much as $2 trillion. Although there is no requirement to align their endowment investment portfolios with their philanthropic missions, more foundations than ever are leveraging impact investing while continuing to generate competitive returns. In recent years, the Ford Foundation, the McKnight Foundation, and the Omidyar Network, among others, have publicly committed to deploying mission-related and program-related investments to advance their social and environmental missions. Last year, the Builders Initiative Foundation transitioned 90% of its $1 billion endowment into MRIs.

“Together, private foundations and family offices have an incredible opportunity to orient over $3 trillion toward impact,” said Tracy Palandjian, CEO and Co-Founder of Social Finance. “As the report highlights, there’s not one way to advance mission-related investing. This is a dynamic time in the field, and we are excited to see asset owners pursue new strategies to achieve social and financial returns.”

“With today’s systemic risks of climate change, racial injustice, and growing economic inequality, I believe foundations must use all of their tools and take risks for a more just, sustainable future,” said Don Chen, President of the Surdna Foundation and Co-Chair of the Presidents’ Council on Impact Investing. “This timely report helps foundations think beyond grants and carve-outs towards mission-related investments that yield financial, environmental, and social returns.”

“Often, the challenge for foundations in pursuing MRIs isn’t regulatory in nature – it’s the entrenched philosophical and operational hurdles of traditional investing that are hardest to overcome. The bright side, though, is that there are winning strategies being pursued by foundations every day to overcome these barriers. This report is useful in that it outlines actionable steps individuals at foundations can take to overcome certain barriers and begin pursuing MRIs,” said Fran Seegull, President of the U.S. Impact Investing Alliance.

“There’s no ‘one size fits all’ approach for increasing the use of mission-related investments by foundations and other impact investors. There are significant examples of foundations that are expanding their impact investing efforts by carving out a portion of their endowments for MRIs, co-investing alongside other foundations and investors, and selecting board of director and investment committee members with MRI experience. This important report provides a clear roadmap to equip and empower foundations to expand MRIs.” said Matt Onek, Chief Executive Officer of Mission Investors Exchange.

To access the full report, please visit:
www.buildersvision.com/social-finance-builders-initiative-report

About Builders Initiative
Builders Initiative is the philanthropic team for Builders Vision, an impact platform dedicated to supporting people and organizations building a more humane and healthy planet through philanthropy, investment, and advocacy. Builders Initiative, through the Builders Initiative Foundation, DAFs, and an impact LLC, invests in and collaborates with non-profits, businesses, and others working toward sustainable solutions to societal and environmental problems across four primary impact areas: Food and Agriculture, Climate and Energy, Oceans, and Community. Learn more at buildersinitiative.org.

About Social Finance
Social Finance is a national impact finance and advisory nonprofit. We work with the public, private, and social sectors to create partnerships and investments that measurably improve lives. Through our Impact Investing portfolio, we design, launch, and manage impact-first investments and innovative financing solutions that generate positive outcomes for people and communities. Since our founding in 2011, we have mobilized $350 million in new investments designed to help people and communities realize improved outcomes in education, economic mobility, health, and housing. Learn more at socialfinance.org.

Media Contacts
Kathleen Strand
Head of Communications, Builders Vision
kstrand@buildersvision.com

Carrie Benjamin
Director of Media & Communications, Social Finance
cbenjamin@socialfinance.org