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Noyes in Action on Mission-Related Investing

The Other 95%

By Victor De Luca
President, Jessie Smith Noyes Foundation
From Proxy Preview 2012

Every day we are faced with hundreds of choices. Choices are made for a reason, in fact many reasons; some are important and others not, some are made consciously and others unconsciously.

So we are experts when it comes to choices—the best ones are informed and the good ones are better than the bad.

But when it comes to managing or investing our money, many of us—personally and professionally—leave the choices to others. We generally take a hands-off approach to our investments, leaving the decisions to fund managers and corporate boards of directors. There is a disconnect here.

About twenty years ago, the Jessie Smith Noyes Foundation decided to broaden our choices so that we could harmonize our investments with our mission as a social justice grantmaker. When it comes to foundations, the IRS requirement is that we payout at least 5% of our assets each year. For us the question became what to do with the other 95%. How could we use the bulk of our resources to further our mission? How do we ensure that there is no dissonance between our grantmaking on the one hand and our investments on the other? How could we advance positive social and environmental practices and businesses through our investments?

Our choice was to "just do it." As our investment policy states, "we believe that efforts to mitigate environmental degradation, address issues of social justice and promote healthy communities should be incorporated as part of business and investment decision making […] foundations have a particular role to play […] seeing their mission not only in terms of the uses of income to fund programs, but also in terms of the ends toward which endowment assets are managed."

Make no mistake about it; we want to make as much money as possible. But we want to do it in a way that reflects our values and is consistent with our mission. So we provide screens, exclusionary and inclusionary, to our investment managers to guide their stock selection. Once the stock portfolio is established, we continue to be active owners. We vote our proxies, co-file resolutions, and engage with the leadership of corporations to impact their environmental, social, and governance practices.

And we do not do this alone. We work with a great bunch of partners, such as the Interfaith Center on Corporate Responsibility, As You Sow, Ceres, and Confluence Philanthropy.

A few years ago, the CEO at a major foundation that was criticized for the contradiction between its grantmaking and its investments, said that "it is naive to suggest that an individual stockholder can stop that suffering. Changes in our investment practices would have little or no impact on these issues."

This type of thinking is just plain wrong. Making sure your investments, the other 95%, are being used to further your mission is just common sense. You cannot be passive about your stock ownership. There are real opportunities to make a bigger difference by aligning your investments with your mission. Get all the cylinders working together, be an active stockholder, and exercise your choices.