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Talking system-change and impact investing at Mission Investors Exchange

ImpactAlpha, May 15 – “You guys are absolutely agreeing with each other,” moderator Tracy Palandjian pointed out midway through yesterday’s opening session of the Chicago gathering of impact-investing philanthropic foundations.

“We just yell at each other while we do it,” said Hewlett Foundation’s Larry Kramer, who mixed it up with the Ford Foundation’s Darren Walker and the Heron Foundation’s Dana Bezerra over the efficacy of moving endowment assets toward “mission-driven” investments (see “Foundation leaders meet to talk place, race and impact,” for some background). The three agreed on the need for changes to prod the market system to deliver racial equity, shared prosperity and environmental sustainability. The disagreements came on how to get there.

Kramer was a lightning rod for his skepticism about redeploying Hewlett’s $9 billion endowment, in addition to its grant budget. “You would have thought that I had told people that their gods are false,” Kramer said. Any financial hit, he argued, could crimp Hewlett’s grantmaking without making a meaningful impact on financial markets as a whole. Hewlett’s grants do support efforts (including ImpactAlpha) to educate private impact investors, as well as to explore ideas to move economic thinking “beyond neoliberalism.”

Walker cast the carveout of $1 billion from Ford’s $12 billion endowment as a first step and a moral imperative. “I don’t believe there are no places to look beyond our portfolio and not see hope and opportunity,” he said. Heron (also a supporter of ImpactAlpha) last year met its goal of deploying 100% of its $250 million endowment towards its mission of job creation and poverty reduction. Foundations can’t ignore that all investments have impact, positive or negative, she said. No community should accept polluted air or other health hazards “on the promise we’ll be back later to fix it with a grant.”

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