Monday, February 18, 2008

Mission Related Investing: Granting vs Investing

Mission related investing provides an additional way for today's foundations and charitable organizations to further their mission. If an organization can grant out 5% of its foundation's assets and make a genuine difference in a particular area, it stands to reason that investing the remaining 95% of the foundation's portfolio in a similar direction can provide an even greater difference. Foundations and other charitable groups are now able to support education, literacy, health care, and other mission areas through their investments, thereby multiplying the effect they can have in their mission area. Through Mission Related Investing, not only can private foundations support their mission, but they can make sure that their investment dollars are not at cross purposes with their goals.

The LA Times provided a great story back in early 2007 (Dark cloud over good works of Gates Foundation)about just such a conflict of interest. The Gates Foundation was found to be granting upwards of $218 million worldwide into polio and measles immunization and research, while at the same time investing over $423 million worldwide in Eni, Royal Dutch Shell, Exxon Mobil Corp. and Chevron Corp. In Ebocha Nigeria, the residents' immune systems are being weakened by exposure to airborne toxins such as benzene, mercury, and chromium making the residents more prone to measles and polio. The main culprit of the airborne toxins? The Eni petroleum plant smokestacks in the surrounding area...and one of the investment vehicles of the Gates Foundation.

If the Gates Foundation decided to practice Mission Related Investing, not only would they be granting money to eradicate polio and measles, but they would also be examining the influence they have as an investor in changing the habits of the corporations in which they are invested. That influence could be shown by letter writing, proxy voting, negative screening, etc. In that way, their grant dollars and their investment dollars would not be at cross purposes and both would be furthering the mission of eradication of polio and measles.

1 comment:

Anonymous said...

It seems like such a waste of money to try to solve a problem one way but ignore another way to solve it.