In 2017, the Community Foundation made a commitment to socially responsible investing by transferring $1 million of unrestricted funds into a new Environmental, Social and Governance (ESG) Pool. Like traditional investments, the ESG Pool aims to minimize risk and maximize gains. The difference is that it does so while considering a company’s stewardship of resources, shareholders and society.
Three years in, the ESG Pool is off to a good start.
“It took a lot of work to get this off the ground,” said Kevin Welu, an investment professional who serves on the Investment Committee. “But the Community Foundation made a commitment, and we’re pleased that returns have been even better than expected.”
The Community Foundation’s Investment Committee recently went through the request for proposal (RFP) process for an investment consultant—a process that happens every 5-10 years to ensure we remain good stewards of charitable gifts. After interviews with three firms, Fund Evaluation Group was selected to remain the Community Foundation’s investment consultant. Fund Evaluation Group has filled this role since 2011.
The Investment Committee consider people, process, performance, and fees when selecting a consultant. Other factors include community foundation experience and ESG investment options and experience. Fund Evaluation Group’s experience with ESG investing is one of the things that truly set it apart.
Having an ESG Pool at the Community Foundation 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.
Last year, Eastern Iowa Health Center established an endowment in the ESG Pool. Like many who opt for ESG investments, their choice was driven by their values.
“Eastern Iowa Health Center is committed to ensuring that our funds are invested in socially, culturally and environmentally conscious companies,” said Joe Lock, President & CEO. “As a nonprofit committed to improving the health of the underserved in the Cedar Rapids area, we believe it is our responsibility to guarantee that our investments are mirroring the work and values of our organization.”
For more about the Community Foundation’s investment management and the ESG Pool, click here.