Thanks to everyone who joined our March 10 “Your Mission, Your Money: What’s In Your Portfolio?” webinar, part of GSIC’s educational series for foundations interested in impact investing. Watch the recording below or on YouTube, and here are 2 documents to download: SESSION RECAP + TOOLS and SLIDES.
EXECUTIVE SUMMARY
Most foundations invest enormous care in defining their mission and designing the impact of their grants. The rest of their assets may sit in investment portfolios that receive less scrutiny beyond performance and risk discussions. Yet their holdings may include companies whose practices sit in tension with the organization’s philanthropic work.
Before an organization can decide whether its investments align with its mission, it must understand what the portfolio actually holds.
Many boards discover that they don’t have a clear view into the companies, industries, and exposures inside their portfolio. This is common; for example, investment reports typically list mutual fund names, not the underlying holdings. And investment advisors aren’t necessarily focused on the business models or impact concerns of specific companies.
The good news: There are free and low-cost tools that foundations can use to examine portfolios more closely. Professional advisors can deepen the analysis, helping them understand where their capital supports solutions, where it creates potential tension with mission priorities, and where opportunities for improvement may exist.
The goal isn’t perfection. The goal is informed stewardship. Once trustees know what they own, they can make intentional decisions about how their capital behaves while it is invested.
KEY INSIGHTS
1. Mission clarity comes first
Conversations about investment alignment begin with the foundation’s mission and the outcomes it exists to create. Those priorities provide the reference point for evaluating whether the portfolio supports or conflicts with the foundation’s work. Most organizations start with broad mission language rather than precise investment criteria, which is completely normal. The goal at this stage is simply to articulate what matters most.
2. Many foundations don’t know exactly what’s in the endowment portfolio
Boards review investment reports regularly, but those reports typically focus on returns, benchmarks, and asset allocation rather than the underlying holdings inside the funds. When foundations look beneath the surface, they often discover exposures they have never discussed, such as fossil fuel companies, tobacco manufacturers, weapons contractors, or businesses whose practices conflict with the organization’s program priorities. These discoveries raise important stewardship questions.
3. Stewardship can include both financial and mission considerations
Traditional definitions of “stewardship” focus on preserving and growing assets so the foundation can continue its work far into the future. That responsibility remains essential. Yet at the same time, many organizations now recognize that its investments can have real-world impact on environmental conditions, public health, economic systems and more.
For this reason, foundations may expand their view of stewardship to include how the bulk of their assets – their investments – amplify or undermine the mission. This perspective can strengthen fiduciary duty by encouraging greater visibility into the portfolio and more informed decision-making.
4. Public tools make it easier to examine mutual funds & ETFs
One widely-used resource comes from the nonprofit As You Sow, whose platform lets investors search thousands of mutual funds and see how they score across a range of environmental and social issues. It offers a simple starting point for boards that want to understand whether widely held funds align with the issues they care about. (Please see the end of this document for links.)
5. Professional portfolio analysis provides deeper insight
Professional advisors use more advanced data platforms to evaluate portfolios. For example, Brighter Investing uses a suite of systems including YourStake, which can analyze holdings across hundreds of metrics and compare impact across different approaches.
This type of analysis helps foundations move beyond general values statements and evaluate measurable outcomes. It allows boards to see where exposure to certain risks may be higher or lower and where investments may support solutions more directly.
6. Engage your investment committee
If your investment committee isn’t thinking about this topic, here are questions to encourage curiosity and conversation:
- Do we have a good picture of what we’re invested in?
- Does our advisor have tools to show how our investments align with our mission? Would it be helpful to conduct an initial portfolio diagnostic?
- Given our mission and the needs of the future (including the vision of the next generation), do we have a policy for how we want our capital to behave?
7. A simple place to begin: Just start the conversion
Many organizations begin this journey with a simple exploratory step that can start with a straightforward proposal to the board: “We propose exploring how the foundation’s investment portfolio aligns with its mission and reporting back with what we learn.”
That step alone can open the door to more thoughtful stewardship. Once foundations know what they own, they’re better positioned to discuss how their invested capital can support the outcomes they seek to create.
Questions? Comments? Please send us an email!
PREVIOUS SESSIONS
Session 1: Why & How Philanthropies Embrace Impact Investing
VIEW THE RECORDING & DOWNLOAD SLIDES
Impact investing means different things depending on who you ask, and it looks different depending on what kind of foundation you run. Led by GSIC’s Sydney England, this session cuts through the jargon with a clear overview of what impact investing actually is, how it works, and what it takes to get started. You’ll also hear from Georgia foundation leaders who are already on this path, sharing what they’ve learned along the way. We’ll cover what applies to everyone and dig into the specifics that matter for your foundation type, whether you’re a private foundation or a community foundation.
