ImpactAlpha, March 18 – The Bay Area-based community foundation is moving $50 million into investments that are aligned with its mission to building inclusive prosperity and racial equity in and around San Francisco. The commitment represents 6.3% of its $800 million endowment.
The San Francisco Foundation is among the 17% of foundations in the U.S. that are building an impact investing portfolio aligned to their programmatic goals. Foundations’ strategies diverge significantly, however, with 57% taking an active approach via direct company and fund investments and 42% relying on positive and negative screening in the public markets.
The $50 million The San Francisco Foundation is committing is aligned to the latter. The foundation is divvying up the among a pool of asset managers and will invest in public equities and debt. Investments will be screened for positive environmental, social and governance (ESG) considerations and to avoid “predatory lenders, private prisons, tobacco companies, retailers that sell assault weapons to the public, and fossil fuel companies.”
“Over time, illiquid investments, such as private equity, will be added to provide targeted social impact. The targeted risk-adjusted return for the pool is 7% to 8%,” according to the foundation’s statement.
The San Francisco Foundation is looking to invest the funds with women- and minority-owned asset managers.
Separate from this initiative, the foundation makes program-related investments via its Bay Area Community Impact Fund. The fund has provided $12.5 million in loans to non-profit organizations in the area over the past 30 years. It recently allocated an additional $10 million to the fund.