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Kellogg Foundation Invests In Mission-Driven Work
Oct. 29, 2007
MCF member W.K. Kellogg
Foundation will invest $100 million, or just over one percent of its assets, in
endeavors that it hopes will recycle capital and preserve the endowment while
driving greater mission impact.
"Mission-driven investing is a relatively new phenomenon in the foundation
community," said Sterling Speirn, foundation president and CEO. "The F.B. Heron
Foundation has been a leading pioneer, having begun this type of investing for
over a decade now, but few foundations have fully realized the potential of what
is commonly referred to as 'double-bottom line investing.' "
Kellogg Foundation will join the forces of its investment, finance and
programming staffs to develop a plan for earning income — meeting or exceeding
performance benchmarks by asset category — while advancing its mission.
To start, the foundation has earmarked $25 million for social investing in
Africa to assist in the social and economic transformation of rural southern
Africa as it affects families, particularly women and children. The remaining
$75 million will be used for mission-driven investments in the United States to
improve the lives of vulnerable children and their families by concentrating
investing in areas concerned with education and wealth creation as realized
through community-based small and medium enterprise development.
"It will probably take us several years to refine this effort into an effective
means of achieving social and financial impact," said Tom Reis, the foundation's
director of innovation and design. "Consequently, we need to be very clear about
our social and financial goals. We are going to make mistakes as we work to
rapidly prototype, test and adjust our strategy based upon real-time findings."
The organization is looking to meet a mix of above- and below-market benchmarks
by asset class. Overall, it expects a rate of return to equal 4-6 percent. The
foundation will start accepting external applications for mission-driven
investments in December and will post specific criteria on its website,
wkkf.org.
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