Mission Related Investing for the Rest of Us series:
- Part 1: Motivation (Using your investments to earn a “social,” values-based, return as well as a financial one)
- Part 2: Background & Investing Theory (Where I’m coming from, and how I used to think about investing)
- Part 3: Banking and Cash Alternatives
- Part 4: Bond-like Alternatives
- Part 5: Stock-like Alternatives
“Mission Related Investment (MRI)” is where a foundation invests some or all of its endowment in ways that not only provide a financial return, but also advance the organization’s mission. For example:
- Providing loans for affordable housing that wouldn’t otherwise be built
- Providing capital for microfinance loans
By using the whole (or a large chunk) of their endowment on projects related to their mission, they can have a larger impact than just using the interest that is paid out (even if non-MRI investments earn a slightly higher return.)
This made sense to me in the context of a foundation, but I was stopped short recently when I was asked why I don’t do it personally. Part of my mission is offering the least well off people around the world conditions that enable them to improve their lot. Economic opportunity through microcredit is one of the key tools to make that happen. I support some microfinance projects with my donations, but I never really considered making “mission related investments” to use the money I have to greater effect. This has started me off on a new direction of reading and research, and my thinking is slowly starting to crystallize.
If I waited until I got it all sorted out, I would probably never finish the post, and it would be too long for anyone to read, so I’ll aim to publish shorter pieces (which will probably still be too long), get them out there more quickly (I’ve been sitting on this one in draft form for more than 2 weeks already), and edit as my understanding is refined further.