Investing for Foundations: Mission or Purpose

This article is excerpted from http://www.boardwalkcm.com.
B. Scott Sadler, CFA -- President, Boardwalk Capital Management

Charitable organizations are in a unique position among investment entities; being able to enhance the public good though grants that are consistent with their charitable "mission". And while a foundation's mission is often narrowly defined (arts, health, environment, education, etc.), the purpose of every foundation is arguably the same:

"A charitable purpose... is for the public benefit."                                                            Charity Commission Website 2011)

With this broader definition, how does a foundation's purpose factor in to its investment decisions? There are bigger issues at work here than many recognize.

Never have foundations had more choices when it comes to investments that provide societal benefit. Even choosing between two large cap companies in the same industry can have vastly different environmental and social impacts. So, where does an "investment" end and a "grant" begin?

Better yet, why must one even choose to define such a question at all, when both can further the organization's purpose and mission?

"Harmonizing a charity's giving and financial investing best serves the charity's public benefit purpose.   Separating the two poses a false dichotomy. As investing and giving become more seamless, value is added." Stephen Viederman, former president of the Jessie Smith Noyes Foundation

Three Characteristics of Responsible Corporate Citizens

This post authored by Daniel Baylis, Director of Content for N/A (the actual name). It appears courtesy of FastCompany.com.

To be "good" in the past meant a variety of things. Perhaps a company's product made people's lives easier. Or maybe they provided jobs in economically challenging times. But chances are the environmental effects of manufacturing were never considered, and overseas production was a financially intelligent decision free from ethical implications. Big businesses and marketing agencies were focused on selling the American Dream. Problematic environmental and social consequences hadn't yet come on the radar.

In the 1970s, a new marketing movement was born. It was called "cause marketing" and it matched for-profit businesses with charitable endeavors. Over the next few decades, the measure of doing good was how much your foundation gave to cancer, AIDS, dolphins, or any other topical issue. Cause marketing had its tangible benefits, but would prove to be trendy and lacking actual commitment.

Today there is an increased consumer value in supporting businesses that don't simply do well, but that do good. Cultural values are shifting, and this sea change is catalyzing corporations to revisit the choices they are making. And this will continue. But we are far from a world where corporations are making choices based upon the triple-bottom line: profits, people, and planet.