Impact investing—also called mission investing or program related investing—is used by foundations of all types and sizes to make a difference in their communities. By investing a portion of the foundation’s assets in ways that generate both a targeted benefit and a financial return, impact investing helps foundations make the most of their capital assets.
By supplementing traditional grant making with impact investing, community foundations can:
Grow Your Impact
Endowed funds are invested to provide a long-term return with little volatility in order to make annual grants in perpetuity. All investments are overseen by our experienced Investment Committee and reported donors via regular fund statements
The allocation policy is designed to provide an optimal asset mix for the portfolio, emphasizing diversification to lower risk and maximize return. There is significant evidence that long-term investors do not benefit from attempting to earn returns through short-term asset class forecasts or market timing. While each asset class and strategy are carefully selected, the focus of the investment is always on the overall portfolio. The Investment Committee has set an asset allocation as shown.
| Asset Class | Minimum | Maximum |
|---|---|---|
| U.S. Equity | 10% | 60% |
| International Equity | 10% | 30% |
| Alternative Investments | 0% | 15% |
| Fixed Income/Cash | 15% | 60% |
In 2024 we launched a new Investment Committee of technical and community-based experts. The committee developed an ambitious 10-year plan to steward foundation investments. The new focus includes moving 5% of our investments beyond traditional markets, i.e. “wall street” to local “main street” projects. This type of “Impact Investing” represents a set of powerful tools being used across the country by foundations of all types and sizes. By investing in ways that generate both a targeted social benefit and a financial return, impact investing helps foundations make the most of their capital assets.
The endowed investment pool is an actively managed perpetual fund. The Community Foundation collects a fee ranging from 1.5% – 2% to cover investment fees and our own operations. Nonprofit Agency Funds receive a fee break. A sliding fee scale is used for endowments over $2 million.
Endowed fundholders may choose an annual grant distribution of 4% – 10% of the fund’s balance, averaged over the previous 12 quarters. Fundholders may also choose to reinvest that amount into the corpus for continued growth.
In 2016 we made our first investment of $600,000 to help build HopeWorks Station. It returned 2 – 4% each year. The investment has reached term and will be recycled back into another local project.
