Several months ago, Exponent Philanthropy and partners Mission Investors Exchange and Arabella Advisors released Essentials of Impact Investing: A Guide for Small-Staffed Foundations. Below is an excerpt from the complimentary and actionable guide, geared to foundations with few or no staff that want to align their investments and missions.
By David Wood, Initiative for Responsible Investment
The early stages of impact investment adoption for foundations lie at the board level.
The idea to explore impact investment as a philanthropic strategy often comes from a single board member, or from staff or consultants who have seen other foundations adopt impact investing. Board engagement is a critical next step for implementing an impact investing strategy: learning what individual board members think about the possibility, educating the board on the state of the field, and taking a broad survey of potential areas of interest or investment opportunities that engage the board’s imagination.
In most cases, board approval is required for a foundation to engage in impact investing, and that often requires ongoing, high-touch engagement from impact investing champions— whether staff or fellow board members. Early board engagement often involves peer-to-peer presentation from board members who are more familiar with the field—and an allaying of the skepticism of board members who may fear that impact investments may not perform well financially or socially.
