Practicing What We Preach Through Sustainable Investment

In 2021 the Investment Committee of the Community Foundation Board of Directors has begun to align our investments with our mission. We haven’t changed our risk-adjusted return targets, but to achieve those targets, we are now making investments in stock and bond funds that practice sustainable investing.

Also called responsible investing or impact investing, sustainable investing is about delivering competitive results while also driving positive environmental, social, and corporate governance (or ESG) outcomes. This includes better racial equity outcomes.

Sustainable funds address racial equity in several ways: Some may not invest in companies that have a negative impact on Black communities, such as for-profit colleges or companies that support the prison-industrial complex. Sustainable funds typically scrutinize public companies' workplace diversity, equity, and inclusion policies; board diversity; the overall treatment of workers; negative impacts of products and services on Black communities; and political expenditures.

Companies with poor performance on racial equity issues may be avoided in sustainable fund portfolios, but more importantly, sustainable investors can push for change at the corporations they do hold in their portfolios. If dialogue doesn't work, sustainable investors may propose shareholder resolutions for a vote at the company's annual general meeting. Vocal shareholder support for such resolutions can spur corporate action even when a vote fails to attract a majority.

By aligning our investments with our mission, the Community Foundation is using its assets for greater impact during the investment phase, then using those assets for impact again in support of our philanthropic mission. Think of it as investing that’s not just focused on profits, but on people, planet and profits.