Impact Investing in Oregon: The Foundation: Meyer Memorial Trust

October 9, 2013 at 12:50 pm 3 comments

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Over the new few weeks, we’ll explore the emerging field of impact investing in Oregon through interviews with nonprofits, foundations, funds and researchers shaping the space. In our first post, we interview Sayer Jones, Mission Investment Manager at Meyer Memorial Trust, about the role of foundations in impact investing and the current work of the Trust. We hope you’ll follow along with the rest of the series, and look forward to your comments and feedback.

Read the other posts in the series:

What is Impact Investing? 

Antony Bugg-Levine and Jed Emerson, who coined the term and wrote the book Impact Investing, provide a succinct definition: “Impact investors intend to create positive impact alongside various levels of financial return, both managing and measuring the blended value they create. The principle of additionality calls on impact investors to target businesses that would not otherwise be capitalized by private investors.”

Paul Brest and Kelly Born, writing in Stanford Social Innovation Review, similarly define impact investing as: “Actively placing capital in enterprises that generate social or environmental goods, services, or ancillary benefits such as creating good jobs, with expected financial returns ranging from the highly concessionary to above market. An impact investor seeks to produce beneficial social outcomes that would not occur but for his [or her] investment in a social enterprise.”

Interview with Sayer Jones, Mission Investment Manager at Meyer Memorial Trust

Impact Entrepreneurs: How would you describe Meyer Memorial Trust in a single tweet? 

Sayer Jones: The company line would be, “Work with and invest in organizations, communities, ideas and efforts that contribute to a flourishing and equitable Oregon.”

For Mission Related Investing it would be, “Using all the tools of our foundation to pursue a better future.”

For Invest Oregon, “Putting our money to work where we work”

What is Mission Related Investing, and why is it important to Meyer Memorial Trust? 

To me, mission related investing is a philosophy that forces you to explore the potential to use your [foundation’s] investments to achieve the same social outcomes that your charity work does. Everyone’s mission is different; for the Meyer Memorial Trust, we work in Oregon and SW Washington, so our mission always has to have a regional focus. If our mission was instead to increase the educational achievement of first-generation immigrants, then our investing purpose would change. This means that everyone who is interested in this type of work needs to be willing to learn about the field, but also is willing to be introspective about how this work really affects their individual mission. It’s a lot harder than just moving money out of the worst types of companies.

To that end, before my time, the Trust designed a mission related investing target (see diagram below). This helped us communicate about the nuances of this type of investing. There are many ways you can pursue your mission without actually divesting. For instance, you could request managers screen out stocks or investments that were in direct conflict with your mission. You could also request that your managers engage companies to change parts of their business that are in conflict with your mission. Even more nuanced, you could request that your managers themselves have policies that address inequality.

MMT MRI target

What is the Invest Oregon program? 

Invest Oregon is our attempt to invest in the center of our mission investing “bullseye.” Over the years, the Trust has invested in and around Oregon and the Northwest, but the investments were opportunistic and lacked a clear vision and purpose. Invest Oregon was created to help us understand why we should invest here and how we can go about doing that without jeopardizing the assets we use to make grants.

At the highest level, the program is a set of investment guidelines that define our parameters for regional investing. We will continue to refine these over the years as we better understand what is required to do this type of investing. We are modeling this investment program after our responsive grants program, which we believe provides a transparent and reasonable process for evaluation and funding of projects.

What are your return expectations for the program?

One of the issues with investing in a highly regionally constrained way, like we are doing with Invest Oregon, is that we do not have much say in what types of investments we can choose from. We are lucky that our state offers a pretty wide variety of funds, but we would be fooling ourselves if we tried to assemble a diversified investment portfolio with specific allocations. Instead, we will be assembling a bottom-up portfolio of investments: we look at each investment on its own merits, evaluating both the potential for social and financial returns. Those that are satisfactory [in both categories] would be considered for funding. This is all a long way of saying that we don’t know what the returns will look like. We intend to capture a portion of what our master portfolio is performing at, but do not expect the portfolio as a whole to have competitive returns.

How will you measure the social and environmental impact of  investments?

Each investment will be evaluated on its own merits. For now, we are setting a few bright line metrics we can track over the course of the investment (jobs created or retained, for instance). We intend to build this out in time, once we have a better idea of what is really important for us to know. We want to learn more about what the Oregon Growth Account and new Oregon Growth Board will be tracking and align our metrics around what they are asking for.

What do you see as the most important role of foundations in fostering the growth of impact investing as a field?

Foundations might seem big, but we have very little money to invest compared to individual investing. Because of this, it’s essential that we take risks with our investing to prove out ideas that can provide financial benefits and also help move the needle in our state. This work can then compel other dollars to move into this space.

What resources do you recommend for anyone wanting to learn more about Mission-Related Investing? 

I learned almost everything I know by participating in the Mission Investors Exchange, which is a national group of funders who are trying to push the bounds of what foundations can do to achieve impact. There are many case studies that have been done in this area. It’s also important to keep informed about what the Oregon Growth Board is doing as they have been doing this type of work for a decade now.

What else would you like our readers to know that we didn’t ask?  

When I started work at the Trust, about 6 years ago, people were asking this question: “How do we convince our boards to do this?” Four years ago the questions started shifting to, “Okay, we are doing this, but there isn’t anything to invest in.” Two years ago I started hearing, “Okay, we have invested, but how broad and deep is the impact?” It amazes me that in half a decade a new industry has assembled itself and is starting to really drive discussions about what can be done to invest with impact. I am sure this field will be alive for years after I retire, so it’s important to keep up with the space because these skills are going to be essential in the finance and investing fields in the future.

By Jacen Greene, Program Manager, Social Enterprise Intiatives at Portland State University’s Impact Entrepreneurs

Entry filed under: Impact Investing. Tags: , , .

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