Aligning Endowment Investments with Mission

By Tom Trinley

Beginning in 1996, when the Foundation first adopted an investment policy, the board and staff have been exploring the question, “Does the source of our grantmaking income matter? In other words, are we concerned whether the investments in our endowment are aligned with, or run counter to, our land conservation and artistic vitality mission areas?


The answer to this question has been, “Yes,” and over the years, the Foundation has developed and evolved a set of impact investing guiding principles.


Early investments were in publicly-traded mutual funds, which screened out companies with negative environmental, social or governance (ESG) practices. Ten years ago, the guiding principles were amended to include private investments in real assets – such as real estate, wetland mitigation and timber. Such investments include a timber company that receives income from the sale of sustainably-forested logs and the sale of conservation easements for the expansion of state parks; and a fixed income manager whose portfolio is comprised of bonds that have financed affordable live-work communities and renewable energy projects.


In 2015, our Finance & Investment Committee, with the support of our investment advisor Cambridge Associates, reexamined, renewed, and made more flexible our mission-investing guidelines, which were approved by the full Board in March 2016.


Going forward, all prospective managers, across the entire portfolio, will be evaluated along a spectrum of potential mission-aligned impacts. Some of the identified areas to consider for inclusion in the portfolio are environmental mitigation, renewable energy, water resources, and clean technology. Areas of concern for potential exclusion include greenfield development, extractive industries, and fossil fuels. This approach will continue to be executed without compromising due diligence standards or long-term, risk-adjusted return expectations.


By focusing on how the Foundation derives its income as well as how it deploys it, risk to the Foundation’s grantmaking resources is reduced, and a greater portion of the Foundation’s assets – not just grants –  is working towards healthy, vital communities with more acres of land well stewarded and support for communities in which arts and culture can thrive.

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Photo credit The Lyme Timber Company

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