Case Studies

Three Organizations Aligning Financial Investments with Philanthropic Goals

Since financial investments have historically been viewed as separate from philanthropic goals, it can be challenging for foundations and socially-minded investors to achieve the alignment they seek.

Our team conducted 16 interviews with asset holders (e.g., foundations, high net worth individuals), their advisors, and investment managers to better understand the challenges they face in seeking or supporting greater alignment between financial investments and philanthropic/social goals. These interviews highlighted many important themes. For example, we heard that clients can’t always find the investment products and services that they need. And, given the current availability of data, shareholder engagement is an important and less understood strategy for aligning social and financial goals.

The following case studies illustrate how individuals and organizations are addressing these challenges. We provide them as examples of what is being done to better align financial investments with philanthropic goals.

The first case study describes how one organization, The Educational Foundation of America, is pursuing the two key strategies for aligning a public equity portfolio: screening companies and shareholder engagement. It illustrates the kind of teamwork and communication required to execute those strategies well. Since reproductive healthcare is a determinant identified in the XX Factor, this case study also provides an example of how one foundation is working to deploy both grant funds and financial investment capital to improve the lives of women and girls.

The second example is RSF Social Finance, a pioneer in mission alignment that is explicitly applying the XX Factor framework to its recently launched Women’s Capital Collaborative, which aims to provide funds to women entrepreneurs. Though not focused on public equity, it shows how the XX Factor can serve as a basis for a different kind of investor due diligence, one aligned with evidence-based approaches for improving women’s lives.

Our last case study discusses how Glenmede, a mainstream investment advisor, responded to an independent school’s desire to align its endowment to ESG factors, as well as its values of diversity, equity, and justice. Though not focused specifically on the outcomes and determinants identified in the XX Factor framework, it illustrates the different services that more mainstream investment advisors may need to consider if they hope to support their clients’ desire for mission alignment.