Comments on: Private Foundation Investment Strategy http://tacticalphilanthropy.com/2007/01/private-foundation-investment-strategy Tue, 07 Oct 2008 10:17:38 +0000 http://wordpress.org/?v=2.5.1 By: MV http://tacticalphilanthropy.com/2007/01/private-foundation-investment-strategy#comment-63 MV Tue, 30 Jan 2007 22:36:32 +0000 http://tacticalphilanthropy.com/2007/01/23/private-foundation-investment-strategy/#comment-63 <i>SRI investing without any kind of thoughtful strategy by the foundation does more to make the board feel warm and fuzzy than it does to support the foundation’s mission. But I do think that foundations need to realize that their investment policy (both as it relates to company selection and risk/return decisions) is an integral issues that affects their ability to achieve their mission.</i> This is what I've been trying to say to people I know who think SRI is a panacea, and others who think an investment policy can be purely results-oriented without any regard to the business processes that create the investment performance. Well put! SRI investing without any kind of thoughtful strategy by the foundation does more to make the board feel warm and fuzzy than it does to support the foundation’s mission. But I do think that foundations need to realize that their investment policy (both as it relates to company selection and risk/return decisions) is an integral issues that affects their ability to achieve their mission.

This is what I’ve been trying to say to people I know who think SRI is a panacea, and others who think an investment policy can be purely results-oriented without any regard to the business processes that create the investment performance. Well put!

]]> By: Dweep http://tacticalphilanthropy.com/2007/01/private-foundation-investment-strategy#comment-62 Dweep Thu, 25 Jan 2007 05:27:05 +0000 http://tacticalphilanthropy.com/2007/01/23/private-foundation-investment-strategy/#comment-62 Your example of a foundation invested in a fossil fuel company, but supporting alternative energy has two flaws. In saying that success in grantmaking may undermine its asset returns, and hence its existence you presumes that the foundation needs to exist for eternity. Why, if the foundation has indeed achieved a paradigm shift and its goal? It is also realistically unlikely that the impact of grantmaking would be so drastic as to threaten the profits of a fossil fuel company. The assets of a foundation are more than an order of magnitude higher than its grants. While I accept that foundations should do some asset analysis, it should probably be restricted to examples such as you give (invest in diametrically opposite sectors). The Gates Foundation is correct in saying SRI isn't their core competence. More important, SRI raises far <a href="http://www.planetd.org/2007/01/13/gates-foundation-to-review-asset-investments/" rel="nofollow">too many ethical questions</a> of its own, to be embraced without pause. Your example of a foundation invested in a fossil fuel company, but supporting alternative energy has two flaws. In saying that success in grantmaking may undermine its asset returns, and hence its existence you presumes that the foundation needs to exist for eternity. Why, if the foundation has indeed achieved a paradigm shift and its goal?

It is also realistically unlikely that the impact of grantmaking would be so drastic as to threaten the profits of a fossil fuel company. The assets of a foundation are more than an order of magnitude higher than its grants.

While I accept that foundations should do some asset analysis, it should probably be restricted to examples such as you give (invest in diametrically opposite sectors). The Gates Foundation is correct in saying SRI isn’t their core competence. More important, SRI raises far too many ethical questions of its own, to be embraced without pause.

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