New Investment Pool Offers Another Layer of Impact

Published: March 15, 2019 | By: Greater Cedar Rapids Community Foundation | Category:
John Myers (right), Executive Director of Indian Creek Nature Center, meets with Jean Brenneman (center) and Laura Booth of the Community Foundation to discuss socially responsible investing.

In 2018, U.S. investors reached an impressive and inspirational benchmark: 25% of invested assets qualified as Socially Responsible Investments. It’s a growing trend for individuals, businesses and even universities to make investments that align with their moral and ethical perspectives. At $12 trillion—and growing rapidly—this is no small movement.

Near the end of 2017, the Community Foundation joined the wave by transferring $1 million of unrestricted funds to a new Environmental, Social and Governance (ESG) Pool. ESG investing is a more targeted version of Socially Responsible Investing, as it considers a company’s stewardship of resources, shareholders and society.

It’s important to note, however, that investments made in the ESG Pool are simply made with an additional layer of due diligence. Whereas traditional investments are made to minimize risk and maximize gains, ESG investments are made to do the same thing while simultaneously considering the ethical implications of those investments.

Because we are a community foundation, this means that our assets have the power to do good twice. By making impactful investments, we can support ethical and responsible businesses around the world; by making grants from those invested funds, we can create positive change here at home.

Having an ESG Pool at the Greater Cedar Rapids Community Foundation also makes it possible for local nonprofits to make global investments that support their vision. The Community Foundation houses over 100 agency funds, each belonging to a nonprofit that in turn can take annual distributions from that fund. Organizations now have the option of moving those funds into the ESG Pool.

Earlier this year, Indian Creek Nature Center did just that, moving roughly 20% of its endowed general operations fund at the Community Foundation into the ESG Pool. “The idea of ESG investing was an exciting prospect to our board of trustees, who manage our endowed assets,” Indian Creek Nature Center Executive Director John Myers explains. John had been eyeing ESG investing for years, and when the option became available at the Community Foundation, he was excited to present the concept to his trustees.

“The Community Foundation was very helpful with that, providing all the necessary information” John says. “To my surprise, this was nothing new to our trustees.” John was ready to explain why Indian Creek should move some of its endowment to the ESG Pool, but the trustees had a different question: what’s the best strategy for moving all of our endowment to the ESG Pool?

Indeed, Indian Creek looks to have 100% of its endowed assets transferred to the ESG Pool within five years, and John knows other nonprofits will be right there with them.

“Nonprofits should be leaders in driving social change,” he says. “We may be great at what we do, but if we’re not collectively focused on the greater good, then we’re missing something.” That collective focus is important to John, who envisions a future where the entirety of the nonprofit sector is committed to making socially responsible investments.

Nonprofits with agency funds and individuals with endowed funds can transfer all or part of those funds to the ESG Pool. New funds created at the Community Foundation have the same option.

“It adds another layer of impact,” says Michelle Beisker, Vice President of Development at the Community Foundation. Michelle points out that although it has always been easy to see how an endowment benefits a nonprofit, we can now see that endowment impacting the larger world. “We’ve always helped donors make an impact in our local community,” Michelle says, “and now we can help them make an impact in the global community as well.”

For more information on the ESG Pool, click here or contact our development team at 319-366-2862.

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