Mission Related Investing: A Policy and Implementation Guide for the Trustees of Wealth Bondage Foundation

"Mission-Related Investing: A Policy and Implementation Guide for Foundation Trustees," by Steven Godeke and Doug Bauer, published by Rockefeller Philanthropy Advisors. More leading edge work on this topic by Mark Kramer, venture capitalist and Havard prof, at FSG Social Impact Advisors. See also F.B. Heron Foundation. Foundations invest billions in Wealth Bondage, that is, in corporations managed solely to a bottom line that externalizes some costs while aggrandizing wealth for owners and managers. Then Foundations make grants to palliate social ills, many of which are undergirded by practices that make the companies in which the foundation invests profitable. Example: A Foundation invests in the auto maker laying off workers and busting unions. Stock owned by the Foundation goes up briskly. The Foundation makes grants to a foodbank for the diplaced workers. Mission-related investing has the opportunity to see it whole and think it through as a whole, using Foundation endowment as well as grants to invest in or support a safer, clearner, more sustainable and just Detroit, for example. They can do such investing by investing in screened stocks, taking private equity, making below market loans, doing loan guarantees, or otherwise putting dollars of principle to work in alignment with the social mission of the organization. Of course, as reading around in these linked material shows, there are key issues right at the Board level. Given that the Foundation Board probably has members of Wealth Bondage management or Board on it, how eager will they be to embrace strategies that call into question the system that the Foundation is trying to change? Foundations are an extension of Wealth Bondage, as Jed Emerson would know, having gotten his start in social venture work with one of the most successful leveraged buyout artists of our rapacious time. The point is to use capital from Foundations to advance capitalism with a human face. That is the bottom line. I mean double bottom line. Or, triple. Still, this concept of social investing through foundations, and "total portfolio activation," in order to address widespread or endemic market failure, has, in the right hands, the potential to foment real change. It is important that we not leave the evolving theory and vocabulary of mission investing for social change in the hands of those indissoluably wedded to venture capital, Harvard Business School, and Wealth Bondage Generally. I hope this trouble maker will sound off on this topic. Well, this is one post that will not win any prizes.