April 10, 2019

NFG speaks with place-based funders on how they are using impact investing to further justice and equity

A newspaper page with graphs and charts for the stock market.

Photo by Markus Spiske on Unsplash

An increasing number of foundations are embracing impact investing as a powerful strategy to potentially make use of all of their assets — not just 5% — to advance their place-based and justice-oriented missions. Last month, several Neighborhood Funders Group members attended Confluence Philanthropy’s 9th Annual Practitioners Gathering to explore how the philanthropic and investment sectors can accelerate movement-building for equity. In reflection, a few folks from NFG’s funder network share their perspectives on, and experience in, mission-related investing.

Beyond grantmaking for racial equity

Soon after Confluence Philanthropy’s Gathering, NFG member Amalgamated Foundation launched the Hate Is Not Charitable Campaign. The campaign brings to light how Donor Advised Funds (“DAFs”) have been used to finance hate groups — often times anonymously — and calls on DAF providers to stop this trend that can fund in direct opposition to some of these foundations’ missions. While the campaign highlights how DAFs can be misused when they are eventually dispersed, Amalgamated is also considering how these funds are being used while they are waiting to be dispersed.

Quote by Tyler Nickerson of Amalgamated Bank: “This is an opportunity for foundations to put all of their resources towards mission alignment and supporting enterprises that center a racial justice strategy.”“DAFs provide a set of resources... that can be risk tolerant, quick moving, and significant in their scale. Utilizing current IRS tax codes, DAF holders are allowed to make program related investments with their resources,” says Tyler Nickerson, First Vice President for Philanthropy Banking at Amalgamated Bank.

By choosing not to invest in some of the market’s largest companies in the fossil fuel, gun manufacturer, and private prison industries, Amalgamated is proactively aligning all of its assets with its values of environmental and social responsibility.

Incourage Community Foundation invests all of its endowed funds, including DAFs, in the same investment pool that includes their impact investments. According to Heather McKellips, Director of Learning & Engagement, "Incourage looks for investment opportunities that advance its vision of an inclusive, adaptive, and sustainable community.” She says, “Prudently thinking through how the principal portion of an investment portfolio (the 95%) can be effectively deployed to positively impact an issue, in addition to the traditional grantmaking portion (the 5%), greatly increases the ability to impact the real issues facing our communities.”

Impact investing strategies

For Incourage, this includes an African American-led private equity fund that seeks to provide business ownership opportunities for entrepreneurs of color and regional Community Development Financial Institutions (CDFIs) that channel capital and technical assistance to underserved populations including entrepreneurs and households of color, and nonprofit organizations serving communities of color. Heather explains, “By investing in CDFIs that do small business lending in a community, area businesses can then more readily access needed funding to start up, retain, and expand operations, meaning more families have jobs and then have less of a need for support services that are often funded by grant dollars.”

Quote by  Mark Paley of The Hyams Foundation: “Hyams does, however, have a long history of utilizing PRIs… These investments are examples of using issue-specific investment models to further Hyams’s racial equity work beyond direct grantmaking.”For foundations just starting with impact investing, it can be helpful to look at these alternatives. NFG member The Hyams Foundation considers itself to be at the beginning stages of its impact investment work and is exploring investment strategies to further its mission to increase economic, racial, and social justice and power within low-income communities in Boston and Chelsea, Massachusetts. In addition to its affordable housing PRIs, Hyams is exploring additional social, economic, and racial justice investment opportunities including social enterprise, wealth building, and solidarity economy models.

“Hyams does, however, have a long history of utilizing PRIs, including two active loans to affordable housing loan funds. These investments are examples of using issue-specific investment models to further Hyams’s racial equity work beyond direct grantmaking,” says Mark Paley, Director of Administration & Finance (and NFG board member).

Quote by Heather McKellips of Incourage Community Foundation: “We have found it to be much more effective to start with the problem or issue, and then look holistically at what the resources are that you, or someone you can collaborate with, can bring to bear.”There are many approaches to impact investing. Unlike Amalgamated Foundation, Nia Community Fund's approach is to invest directly into solutions-focused companies with diverse leaders, rather than screen out sectors. Founder and Director Kristin Hull says, “We begin with our end goal in mind, rather than with traditional investment philosophy. We think about how we can use each dollar to maximize our positive impact.” Their investment dollars go to women and people of color-led businesses working to address social justice and environmental sustainability.

Amalgamated is also exploring new models seeking to expand capital to Black, Brown, and Native communities. “This is an opportunity for foundations to put all of their resources towards mission alignment and supporting enterprises that center a racial justice strategy,” says Tyler Nickerson.

Impact investing should always be centered around core values. Evaluating how a foundation is putting its values into practice can even start with how they interface with the investment industry itself. For example, Nia Community Fund looks for companies, funds, and investment managers that use a racial justice lens, and predominantly works with women and people of color.

Quote by Kristin Hull of Nia Community Fund: “Our investment dollars far outweigh our grant dollars and so we are really strategic with both buckets and do as much to leverage what we have and have every dollar be as effective as possible.”Incourage Community Foundation takes their role as an investor even further by being “active owners who vote proxies and practice other forms of shareholder engagement to encourage inclusive and fair labor practices, strong governance, and responsible environmental practices by corporations doing business in our state,” according to Heather McKellips.

Amalgamated’s Tyler Nickerson suggests that investors and grantmakers “listen to the communities in which they seek to support. They know what the community needs and the type of businesses it can support. Community members also know who is a fair employer and a good steward.” He notes that centering those voices and racial justice is key in developing solutions like a fair and equitable business strategy, whether it involves grocery stores or clean energy or manufacturing jobs.

Takeaways and lessons learned

1. Much like a healthy business model, communities need diverse forms of investment.

“Communities need multiple types of capital to become inclusive, thriving places. Charitable grants can’t be the only the tool to build greater equity within community,” says Tyler Nickerson. “Grants coupled with investment capital will create an integrated stream of resources to build communities where all people can succeed.”

2. For some funders, the grant-to-investment ratio can be strengthened, even while preserving an endowment’s lifespan.

Nia Community Fund’s Kristin Hull points out, “Our investment dollars by far outweigh our grant dollars and so we are really strategic with both buckets and do as much to leverage what we have and have every dollar be as effective as possible.” Nia Community Fund focuses on working beyond the status quo and investing into a just, sustainable, and inclusive economy, which means having an investment policy statement and investment practices that keep equity and justice as the core principles.

3. Focus on community needs first, and develop your investment model accordingly.

While foundations often start with an investment product that they then try to figure out how to use to address their focus issues, Heather McKellips of Incourage Community Foundation says, “We have found it to be much more effective to start with the problem or issue, and then look holistically at what the resources are that you, or someone you can collaborate with, can bring to bear."

4. Spread the risk and enhance the impact through collaboration.

This collaboration is key to moving the philanthropic and investment sectors to a more integrated and effective model. Confluence Philanthropy and NFG are creating spaces to explore ideas around impact investing, such as the Hyams Foundation’s interest in engaging with other organizations on what racial justice investment metrics could look like.

Amalgamated’s Tyler Nickerson advises, “Find your allies and ask them to join in community-based solutions. Doing so spreads the risk, expands the capital stack, and helps move other institutions in their learning journey.”

October 24, 2019

Reflections from Philanthropy Forward's First Cohort

Philanthropy Forward: Leadership for Change is a CEO fellowship program created by Neighborhood Funders Group and the Aspen Institute Forum for Community Solutions. The program's first cohort started in October 2018 in furtherance of building and advancing a shared vision for the future of philanthropy.

Hear perspectives from members of the first cohort as they reflect in this video on their work together as strategic thought partners, addressing philanthropy's most challenging issues and aligning to build a financial engine for social change.

2018 - 2019 Philanthropy Forward Cohort

A grid with individual photos of each of the 20 members of Philanthropy Forward's 2018-2918 cohort..

Click here for participant bios

  • Dimple Abichandani, General Service Foundation
  • Sharon Alpert, Nathan Cummings Foundation
  • Elizabeth Barajas-Roman, Solidago Foundation
  • Ned Calonge, The Colorado Trust
  • Irene Cooper-Basch, Victoria Foundation
  • Farhad A. Ebrahimi, The Chorus Foundation
  • Nicky Goren, Meyer Foundation
  • Justin Maxson, Mary Reynolds Babcock Foundation
  • Joan Minieri, Unitarian Universalist Veatch Program at Shelter Rock
  • Maria Mottola, New York Foundation
  • Mike Pratt, Scherman Foundation
  • Jocelyn Sargent, Hyams Foundation
  • Pamela Shifman, NoVo Foundation
  • Starsky D. Wilson, Deaconess Foundation
  • Steve Patrick, Aspen Institute Forum for Community solutions
  • Dennis Quirin, Raikes Foundation
September 10, 2019

For Love of Humankind: A Call to Action for Southern Philanthropy

Justin Maxson, Executive Director of the Mary Reynolds Babcock Foundation, calls on fellow funding organizations based in the South to respond to the federal government's anti-immigrant rhetoric and policies with three concrete actions. This post was originally published here on the foundation's website.

Justin was part of the first Philanthropy Forward: Leadership for Change Fellowship cohort, a joint initiative of Neighborhood Funders Group and The Aspen Institute Forum for Community Solutions. The Mary Reynolds Babcock Foundation, which strives to help people and places move out of poverty and achieve greater social and economic justice, is a member of NFG.


 

Justin MaxsonWe are issuing a clarion call to Southern philanthropic organizations to respond to the manic drumbeat of anti-immigrant rhetoric and cruelty coming from the White House. This month began with a mass shooting targeting the Latinx community. Days later, massive raids tore apart hundreds of families and destabilized Mississippi communities but levied no consequences for the corporate leadership that lures vulnerable people to work in grueling, dangerous conditions. It is astounding that since those events, with the resulting fear and trauma still reverberating through immigrant communities across America, the administration has: 

  • repeated its intention to end birthright citizenship, a 14th Amendment guarantee that babies born on American soil are citizens. 
  • attempted to terminate the Flores Agreement, which sets standards for the care of children in custody. This would allow the administration to detain migrant families indefinitely in facilities where children are dying of influenza, yet flu shots are not administrated, where children are sexually assaulted, where soap, toothbrushes, human contact and play are not standard, and where breastfeeding babies are taken from their mothers. Child separation is known to cause permanent psychological trauma and brain damage.
  • announced changes to the so-called “public charge rule” to make it harder for legal immigrants to secure citizenship if they use public assistance. As our partners at the Center on Budget and Policy Priorities argue, this change would cause many to “forgo assistance altogether, resulting in more economic insecurity and hardship, with long-term negative consequences, particularly for children.” Further, the decision “rests on the erroneous assumption that immigrants currently of modest means are harmful to our nation and our economy, devaluing their work and contributions and discounting the upward mobility immigrant families demonstrate.”

There was also a recent effort to effectively end asylum altogether at the southern border. And despite the Supreme Court ruling blocking the citizenship question from the 2020 census, advocates believe the debate will depress response rates. As we wrote earlier this month, this administration’s animus against immigrants and increasingly aggressive ICE actions are compounding the devastating effects on communities across the country. 

Why Southern philanthropy? 

An analysis of recent grantmaking by the National Committee for Responsive Philanthropy found our region has deportation rates five times higher than the rest of the country, yet Southern pro-immigrant organizations receive paltry philanthropic funding. Barely one percent of all money granted by the 1,000 largest foundations benefits immigrants and refugees, and even that money doesn’t go to state and local groups that are accountable to grassroots and immigrant communities. Organizations in Southern states receive less than half of the state and local funding of California, New York and Illinois. 

Where to begin? 

Speak up. As Desmund Tutu taught us, “If you are neutral in situations of injustice, you have chosen the side of the oppressor.” Use your institutional voice to influence decisionmakers.

Examine your foundation’s policies. Find out if your endowment is invested in private detention centers. Consider how supporting organizing, power building and policy advocacy could advance your mission. NCRP has more recommendations in its report.

Give generously. Our partners at Hispanics in Philanthropy have curated a list of organizations helping the families affected by the raids across Mississippi. Our partners at Grantmakers Concerned with Immigrants and Refugees have compiled a list of ways to help, from rapid response grants to long-term strategies. 

Many of the Babcock Foundation’s grantee partners are doing more and more immediate protection work, stretching themselves thin and often putting themselves at risk. They are keeping families intact in the short term while building power for the long term, so history will stop repeating: 

If you know of more resources, please share them. If you’d like to learn more about the organizations on the ground across the South – or think about ways we can do more together – contact us. We are always looking to learn and act in alignment with our fellow funders toward a shared vision of a strong, safe, welcoming and equitable region. 

Activist Jane Addams said, “The good we secure for ourselves is precarious and uncertain until it is secured for all of us.” Regardless of a foundation’s mission, abject cruelty surely undermines it. It also undermines the most basic tenet of philanthropy, which literally means “love for humankind.” We see no love in this administration. It’s up to all of us to spread it.