The San Francisco Foundation has announced an investment of $50 million from its endowment in a new mission-aligned impact investments pool.
The new funding — which represents 6.3 percent of the foundation's $800 million endowment — will be allocated among a diversified portfolio of managers using a variety of socially responsible strategies, including social screens and Environmental, Social, and Governance (ESG) considerations, with a targeted risk-adjusted return of between 7 percent and 8 percent. The foundation will continue to seek out investment firms owned by women and people of color, who historically have faced barriers to accessing capital.
The pool will avoid investments in predatory lenders, private prisons, tobacco companies, retailers that sell assault weapons, and fossil fuel companies. While the funds initially will be invested in public equities and public debt, illiquid investments such as private equity will be added over time to provide more targeted social impact.
The foundation's commitment to impact investing began with a loan program for nonprofits in 1989, nearly twenty years before the term "impact investing" was coined. To date, the foundation has loaned $12.5 million to organizations working to advance equity in the region through its Bay Area Community Impact Fund, a vehicle for program-related investments, and it recently committed an additional $10 million to the program with the goal of tripling its impact investments in the Bay Area over the next few years.
"The scope and complexity of the issues that we are trying to address in the Bay Area require us to use all of the tools in our tool belt," said San Francisco Foundation CEO Fred Blackwell. "We see investing in a values-aligned manner as part of how we achieve our overall mission and we don't think we have to sacrifice returns."
(Photo credit: Casey Horner/Unsplash)