Mission Related Investing
“The Park Foundation’s approach to making a difference in the world is holistic. Whether we are investing in social change, or the market, we will remain mindful that money is a means, and not an end unto itself. As a foundation, our true bottom line is the good we do in the world. The very same values and ideals that guide our disbursement of funds to the programs that we support should also guide the management of our foundation’s capital assets.”
– Adelaide P. Gomer, President of Board of Trustees, Park Foundation
Mission Related Investing (MRI) is the term used to describe a number of different ways in which a foundation can utilize its investment portfolio, or endowment, to advance its philanthropic mission.
Park Foundation annually awards approximately 6-7% of the value of its portfolio as grants, as compared to the 5% minimum required by the IRS. In the Foundation’s desire to effectively utilize the other 93% of its assets to advance our mission, it has undertaken the following Mission Related Investing activities:
Environmental, Social and Governance (ESG) screening of the Foundation’s Investment Portfolio
In 2011 the Foundation established an ESG Investment Policy that currently includes screens on investments in thirteen categories. These screens serve to advise our investment advisors and fund managers on investments we wish to exclude from our portfolio. Categories screened include:
Environment (including the Fossil Fuel 200) Employee Relations
Product Liability and Corporate Governance Animal Testing
Nuclear and Conventional Weapons Nuclear Power
Community Relations Media
A copy of the Foundation’s ESG Policy is at: (pdf)
Since 2012 when the current screening policy was initiated the Foundation has met or exceeded its benchmark targets for portfolio income performance:
Year Actual Benchmark
2012 11.33% 10.56%
2013 20.67 19.06
2014 6.67 5.86
2015 .98 -0.27
The Foundation actively votes its proxies along Institutional Sahreholder services (ISS) -(http://www.issgovernance.com/) Socially Responsible criteria. All of the Foundation’s fund managers are required to utilize these guidelines in voting our shares of publicly held corporations.
Since 2011 Park Foundation has, working though intermediaries, offered its holdings for filing or co-filing shareholder resolutions on issues of priority to the Foundation. In 2016 the Foundation is participating in seven resolutions, primarily around environmental and community impacts and investment risk from natural gas hydrofracking, stranded carbon asset risk, and requesting reports on reducing greenhouse gas emissions.
To conduct these resolutions with holdings that would otherwise be excluded from the portfolio, the Foundation maintains a separate Shareholder Action Account where it retains stocks at low value (less than $10,000) to be used for executing resolutions. This account holds approximately 34 stocks that are primarily oil and gas, agriculture and media companies.
Park Foundation was one of the original 17 signatories to the 2014 Divest/Invest Initiative (http://divestinvest.org/) that encouraged foundations to divest themselves of carbon stocks, and commit themselves to “climate solutions” investments.
Park Foundation has, with the exception of holdings in the Shareholder Action Account described above, eliminated the “Carbon 200” (http://gofossilfree.org/top-200/) stocks from its portfolio. The Foundation has conservatively estimated that climate solutions investments constitute approximately 15% of its current portfolio.
Program Related Investments (PRIs)
PRIs are loans that the Foundation makes to organizations that align with the Foundation’s mission. Chief characteristics of PRIs are that they must advance the philanthropic mission of the lender and they must be at below market interest rates. The Foundation’s PRI program was initiated in 2010 with the restriction that total lending not exceed 1% of the total portfolio value, and that PRIs be focused locally in Tompkins County, NY.
As of December 31, 2015 PRI commitments totaled $3 million dollars. The Park Foundation’s PRI roster includes:
Alternatives Federal Credit Union (2010) Secondary capital
Ithaca Neighborhood Housing Services (2010) Green affordable housing loan fund
Alternatives Federal Credit Union (2012) Residential energy efficiency loan fund
Tompkins County Area Development (2012) Sustainable business loan fund
Finger Lakes Land Trust (2012) Land acquisition fund line of credit
RSF Finance (2012) Regional Access food distributor loan guarantee
State Theatre (2014) Restroom renovations
TCAction (2014) Head Start Program building renovation/expansion
Finger Lakes ReUse (2014) Transition to new material reuse facility
A report on the first five years of the Foundation’s PRI program is located at [link/pdf]
Wherever possible the Foundation invests locally. It maintains credit card accounts with the local community bank and operating checking accounts with an Ithaca-based regional bank. The Foundation’s PRI commitments and other local investments total in excess of $4 million.
The Foundation’s working definition of impact investing is when we actively seek opportunities to invest in companies that advance environmental solutions. Our primary focus is on water stewardship.