It’s the old adage, put your money where your mouth is. And that’s what foundations have been doing for several decades. Casey’s work targets destitute neighborhoods and communities. To impact the lack of financial capital, literacy and services, Casey started depositing funds in local community depositories. The investment examples in this report show how these socially responsible deposits opened the door to the creation of new financial products and services for these tough neighborhoods.
It’s good business connecting grant-making programs with administrative practices
Findings & Stats
Foundations typically allocate 5% of their endowment revenue—the legal minimum—for grant making.
Deposits can have a much bigger impact than grants as they attract more funding and services.
Program-Related Investments (PRI) started with the Ford Foundation in 1971. By 2001, PRI funding had increased to $232.9 million by 135 funders.
In 1998, trustees of the Annie E. Casey Foundation allocated $20 million for social Investing. By 2002, the Foundation established a formal program and increased the allocation to $100 million.
Social investing is seen as a way a foundation can align investments with the values that shape its grant making.
Many distressed neighborhoods offer relatively untapped sources of opportunity for financial institutions.
Statements & Quotations
MRDs [mission-related deposits] have the potential to generate great returns financially and socially. They enable us to align our dual objectives, and serve as an excellent catalyst for program staff to develop fruitful partnerships with financial institutions that can benefit the communities in which we work.
– Christa Velasquez, Director of Social Investments, Annie E. Casey Foundation
Typically structured as insured certificates of deposit, many of these deposits add to an institution’s capital base, often allowing it to develop products and services that benefit communities.
Foundations of all sizes and focus areas are practicing different types of social investing.
Foundations often combine various social investing approaches to fully integrate the effective management of endowment assets and achieving charitable purposes.
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