Mission Aligned Investing
Mission Aligned Investment Policy
The Valentine Foundation is committed to aligning up to 10% of its assets in order to increase impact beyond grantmaking activity. We, the trustees of the Valentine Foundation, formally adopt the following Investment Policy Statement to reflect our values—
In order to increase the impact of The Valentine Foundation’s assets and further the mission, up to 10% of our assets will be invested in mission related, and/or socially responsible vehicles. The Foundation’s Investment Policy and asset allocation will be updated to reflect:
- Mission, Goals and Objectives
- Risk and Return Expectations
The most important objective for this Mission Aligned portion of our assets is to promote greater social impact beyond our grantmaking activity. We believe that investing some of our assets in mission-aligned projects enables us to scale up our social impact while achieving philanthropic goals in line with our mission.
Putting Our Money Where Our Mission Is
Mission-aligned investing has been getting some buzz around the philanthropic community for the last few years. So when the Valentine Foundation’s board members heard about it at the PHILAnthropy Annual Conference in 2015, it did not stand out anymore than before. But when a sister family foundation explained how easy it was to expand the reach of their mission, Valentine was in.
The Valentine Foundation began in 1985 by Phoebe Valentine to fund programming that advances social change of women and girls. The Foundation consists of a part-time executive director and a six-member voluntary board who oversee the granting of approximately $180,000 dollars annually. While none of the board members is a trained financial advisor, they work collaboratively with a long standing financial management company (led by a former trustee) to review the endowment’s portfolio at each meeting including the performance of equities, mutual funds, and cash. In the fall of 2016, they realized they could do more.
It started with placing the 5% cash that was sitting in a large bank, whose name is prominent on Wall Street, into a local community held bank. By allocating this cash balance on the local level, Valentine was honoring the ability for local banks to lend locally. And this action was an extremely low risk as the credit union is FICA insured institution.
Next, the trustees considerd how they could use other cash in low risk ways. After all, they did not want to risk the highs and lows of the S&P nor did they want to sit on a CD for 10 years. At this moment, they learned that the Inter-faith Housing Alliance (a 501©3 nonprofit organization dedicated to working with individuals experiencing homelessness) was in need of a loan to rehab a property that would serve families in transition.
Inter-Faith Housing Alliance
Valentine Foundation considered the risk – by lending Inter-Faith $30,000 over five years at an extremely low interest rate, they would experience the same financial gains of a CD. And while the risk might seem higher, they evaluated Inter-Faith’s financial statements, references, and project scope and decided the risk was low. There was already other committed funding on the line with Inter-Faith’s project and Valentine could create a lift with the renovation project. It was a win-win.
The advisement of that sister family foundation cannot go unnamed. It was the contact and support of Laura Kind McKenna, formerly the executive director of the Kind Foundation, that helped the Trustees keep these activities simple while protecting their endowment. Valentine is extending this type of support to other small foundations as it was this pivotal peer advice that led to their action.
The Reinvestment Fund
In 2018 the Foundation added a $100,000 investment in the Reinvestment Fund, PhilaImpact Fund, a Community Development Financial Institution Fund (CDFI Fund) that plays an important role in generating economic growth and opportunity in the Greater Philadelphia region.
2019 Mission Aligned Update
We continued to pursue our 10% commitment to mission aligned investing in 2019. The board approved a 5-year $25,000 working capital investment in First Step Staffing, adding workforce development and returning citizens to our areas of impact. First Step Staffing connects people experiencing homelessness and those returning from prison with jobs. The Atlanta-based non-profit opened operations in Philadelphia in January 2018. In July 2019 the Inquirer reported on the job fair they hosted for people who had been arrested and were on pretrial supervision. They had 270 temporary jobs available, with pay ranging from minimum wage to $15 an hour.
First Step provides companies with a socially responsible alternative to typical staffing agencies, while offering meaningful employment opportunities for individuals who are in transition. They provide critical supportive services including job coaching, door to door transportation, uniforms, and other supports needed to increase employees’ chances for long-term success. Upon hearing our proposal Valentine Board member, Annike Sprow, gave it a resounding Yes vote. As a social worker working daily with returning citizens, she knows first-hand the challenges they face in finding employment. She says First Step is a go-to resource for her and that they are truly successful in finding quality jobs for her clients.
In addition to the First Step investment the board also approved expanding the 10% commitment to include the Leadership Fund portion of the Valentine endowment. Contact us at email@example.com if you have a high impact social investment, you’d like us to consider.
2020 Mission Aligned Investing (MAI) Update
Despite and because of its challenges, 2020 gave us opportunities to deepen our commitment to racial justice as a core goal of our investments. We have joined the year-long Mission Aligned Investing cohort training sponsored by the Philanthropy Network. This is a group of more than ten foundations with representatives from both staff and board. Each foundation has committed to a project to shift more capital into the community using a racial equity lens. In addition to the cohort, we have continued adding high-impact projects to our MAI portfolio. Here is a list of three new CDFI investments we made this year:
- In April, we were approached by the Women’s Opportunity Resource Center (WORC) for a loan. WORC had approved more than 30 SBA Paycheck Protection Program (PPP) loans to women and minority owned micro and small businesses and needed $1.5 million to quickly deploy the loans. WORC approached 15 foundations, including Valentine to each lend $100,000 interest free, to be repaid on November 1st, 2020 when funds were repaid by the federal government. Valentine approved this COVID-19 response loan in less than a week.
- In June, also in response to the COVID-19 crisis, Valentine invested $50,000 total ($25,000 out of Leadership and $25,000 out of the Foundation) in The Enterprise Center (TEC), a 30-year-old Black led business incubator and non-extractive lender based in West Philadelphia. TEC supports 100% minority owned businesses. We matched the pandemic adjusted terms they offered to their borrowers – 0% for the first 6 months and 1% interest for the remaining 2 ½ years.
- In August we made a $25,000 loan to the Impact Loan Fund for 5 years at 2% interest. Impact Loan Fund is the lending arm of Impact Services in Kensington, founded in 1974. Impact Services (a non-profit community-based organization) partners with Kensington Corridor Trust, an innovative cross-sector partnership that include Shift Capital (a social impact real estate B-Corp), IF LAB (an inclusive technical assistance provider), and PIDC (Philadelphia’s public-private economic development corporation). This partnership takes a multi-stakeholder, multi-pronged approach to corridor revitalization, combining lessons from like-minded efforts that have proven effective in strengthening corridors.
The pandemic and police violence against the Black community have exposed and reminded us of the racism and inequities that exist in our community. We are excited about learning and doing more to uplift and address these issues. Be in touch if you hear of projects in which we might invest.