New Study Urges Foundations to Link Mission Investments with Grants

May 6, 2010

How do foundation leaders decide when to deploy mission investments and when to utilize grants in addressing social challenges? How can mission investments be integrated into a foundation's program strategy to achieve maximum social impact?

As mission investments, also known as impact investments (investments that advance a foundation's social mission and also earn financial returns) become more prevalent, funders are increasingly looking for ways to align their investments with their grantmaking activities. Yet, very few funders have developed a comprehensive approach that links mission investing and grantmaking into a single integrated strategy, notes a new report by FSG Social Impact Advisors.

In Maximizing Impact: An Integrated Strategy For Grantmaking and Mission Investing in Climate Change, the authors provide a framework for foundations to identify the different ways social challenges, particularly climate change, may be addressed through a combined approach of mission investments and grants. Funded by the Surdna Foundation, and developed from interviews with more than 50 practitioners and experts from the field, the report highlights several examples of foundations working to address climate change through this integrated approach.

"Funders who adopt investing to help drive their program work will find many amazing entrepreneurs, ideas and portfolio asset classes today," comments Gregory Miller, who built and led Google.org's philanthropic investments and grants teams through last year, and is a member of the report's advisory board. "Complementing a grants program and the experiences funders bring, mission-advancing investments can help programs become more sustainable, paving the way for long-term philanthropic impact."

Mark Kramer, co-author and Managing Director at FSG adds, "Mission investments can serve a powerful role in leveraging commercial capital using the world's relatively limited philanthropic resources. We hope that this report helps more foundations utilize this tool to create greater social impact than what grants or investments can achieve alone."