Mission Investors Exchange–A Merger of M4M and the PRI Makers Network

July 9, 2012 UpdateSince we posted our profile of More for Mission (M4M) in June 2010, the organization grew to a total membership of 96 foundations. In May 2012 M4M and Program Related Investment Makers Network (PRI) combined to form the Mission Investors Exchange.
The merger of the PRI Makers Network and More for Mission was the end result of a long-standing relationship between the two organizations. PRI and M4M were initially focused on different areas of the mission-investment spectrum. PRI focused primarily on below-market investment while M4M focused on market rate investments. Gradually, conferences hosted by the two began to focus on the entire mission-investment spectrum. Leadership from both organizations realized the parallels between their respective missions, and began to contemplate the possibility of a merger in 2011. These efforts culminated in the formation of Mission Investors Exchange in May 2012.

Located in Seattle, The Mission Investors Exchange includes more than 200 member foundations and mission investing organizations of different sizes. Full member organizations are using, or learning to use, program-related and mission related investing (PRI/MRI) to reach philanthropic objectives. Affiliate members work in partnership with foundations to combine and deploy capital in communities to achieve social and environmental goals. Peter Berliner, who joined PRI as Managing Director in 2009, heads the Mission Investors Exchange as Managing Director. The Mission Investors Exchange, a project of Philanthropy Northwest, is in strategic partnership with the Initiative for Responsible Investment of the Hauser Center of Nonprofit Organizations at Harvard University.

In July of 2011 Lisa Hagerman left More for Mission and accepted the position of Director of Programs at Double Bottom-Line Investors (DBL). DBL Investors is a venture capital firm that focuses on both achieving high returns for its portfolio members, as well as planning and helping to implement double bottom line strategies into existing portfolio businesses.—Evan Lozier. Evan is Capital Institute’s Summer 2012 intern.

June 2, 2010—More for Mission was launched in 2007 by the Annie E. Casey Foundation, the Meyer Memorial Trust and the F.B. Heron Foundation, with the goal of helping foundations better align their investments with their underlying mission.

The More for Mission network currently includes 64 foundations with over $30 billion in assets. More for Mission seeks to encourage more investment not only in traditional program-related investments (PRIs) that are expected to earn below market rate returns and are aligned most closely with a foundation’s mission, but also in market-rate mission investments (MRIs) that support broader social and/or environmental goals.

Below Lisa Hagerman, Director of More for Mission, speaks of the challenges and opportunities facing nonprofits as they seek to become more active in mission investing.

What is the distinction between a mission investor and an impact investor?


“Our work with foundations over the past year convinces us that issues around creating internal capacity, working with consultants and identifying external capacity, building mission-specific investment infrastructures, and integrating mission investing into existing or new investment strategies, are all key issues in this next phase of field development.”–Lisa Hagerman, Director of More for Mission

Lisa Hagerman: The ways we define a mission investor is a foundation seeking investment opportunities that align with the mission of the organization, whether market rate that broadly support the mission, or below market that create a specific direct programmatic impact. (The below market rate, or PRI, investments can count along with outright grants toward the 5 percent payout required to maintain a foundation’s tax exempt status.)

The mission investor’s goals are different than, say, a public pension fund that has a fiduciary duty to maintain a targeted rate of return to benefit retirees but that may also look at investments that are targeted for the benefit of a particular geographic location or for a particular social good. Mission investors’ reason for being is rooted in their mission. They are furthering their ultimate purpose for being in existence by being involved in mission investing. That said, each foundation has its own self-definition and has an overall concept of mission investing particular to the organization.

Can you talk about More for Mission’s goals to encourage both PRIs and MRIs?

Lisa Hagerman: The first PRIs were made in 1969 [see Note 1 below] so they have been around for a long time. There is an established organization called the PRI Makers Network geared to help foundations make PRIs and it provides a database of PRI opportunities. But what M4M is trying to do with mission investment is say, “let’s try to move beyond PRIs and think about market rate investments.” How foundations invest the other 95 percent of their endowment is where we hope to create more awareness.

We were initially targeting 1 or 2 percent of foundation endowments going toward mission investing but some are already doing 100 percent of assets. We still have a goal of showing an increase of 2 percent overall but we found 2 percent may be too high a hurdle for the largest foundations and may be too small for the smallest.

Another of More for Mission’s goals is to connect investors with common missions. There will continue to be opportunities for co-investments, opportunities where you have a large and small foundation being able to co-invest on a transaction. The larger foundation may be able to do more of the heavier due diligence required and the smaller may come in with a smaller investment amount and help on a pooled transaction [see Note 2 below].

In more and more cases we are also seeking to involve both a for-profit and a nonprofit organization in an investment. That might be, for example, a venture involving a for-profit real estate developer and a not-for-profit community association imbedded in the deal. The latter is monitoring the social returns in the structuring of the deal to be sure that they are going to be realized. An example of these hybrid structures is The Northwest Louisiana Community Development Fund, which includes a consortium of institutional investors as well as private and community foundations [see Note 3 below].

Can you describe the information portals you provide to your network?

Lisa Hagerman: M4M recently launched a portal for its members that offers access to Cambridge Associates proprietary listing of over 250 mission-related fund managers. The portal also includes a listing of nearly 900 Community Development Financial Institutions (CDFIs) with a tailored search function by state and type of CDFI (e.g., bank/thrift, loan fund, venture fund) and 1000 low-income designated credit unions. M4M will continue to enhance the portal including a “Mission Investing Exchange” to allow member foundations to share information on their particular MI area of interest. In its next phase of development the portal could expand to include other service providers or references from the M4M network or other trusted parties.

What do you consider to be the principal challenges facing mission investing?

Lisa Hagerman: There are real barriers standing in the way of more foundations getting involved in mission investing. Some may want to consider getting involved in the sector but it often comes down to a foundation board’s risk aversion, its traditionalist view that says, “let’s use conventional investment to outperform the market and continue to make the impact through traditional grant making.” And it might also be as simple as they don’t have a formal mission investing policy. The Vermont Community Foundation, for example, has a very detailed mission investing policy while other foundations may include mission investing or responsible investing language within their overall Investment Policy Statement. On our website we provide examples of foundation mission investing policy statements [see Note 4 below].

Another obstacle can be that the investment officer making the investment for the endowment has a very narrowly defined role and, on the other side, is the program officer on the grant making side, and they are working in separate silos. For these types of mission investments to come together it takes both sides to think about how to target the financial returns and the social returns.

Another issue is that very often the foundation consultants are either neutral to negative on this concept. It is a real development that Cambridge Associates has created a group focused on mission investing. I think the more these gatekeepers familiarize themselves with mission investing and begin to understand that there is an investment infrastructure with a viable, broad range of investors, the better it will be for the development of the market.

Mission investors’ reason for being is rooted in their mission. They are furthering their ultimate purpose for being in existence by being involved in mission investing.

Consultants in the field of mission investing may either advise their clients specifically on mission-related strategies (both below-market, program-related investments and market-rate investments) or broadly, on integrating environmental, social, and governance (ESG) factors in their investment management process. We are trying to create more transparency in the field and directing foundations to a broad landscape of niche consultants who are advising on mission investing strategies and/or managing a foundation’s mission investing portfolio. [see Note 5 below].

What role can the mission investors play in product innovation?

Lisa Hagerman: As foundation investors become more active in creating products they will help to move the whole mission-investing marketplace. Often, for example, grant dollars might need to be part of launching a new product. Or if a not-for-profit is seeking a loan from a commercial lender a foundation may be able to step in with a guarantee that will allow the commercial lender to extend it [see Note 6 below].

What new initiatives does More for Mission have planned in the coming year?

Lisa Hagerman: M4M will continue efforts to expand its member network, engage foundations on the broad topic of mission investing, and build an information infrastructure for foundations to support mission investing. As part of one of our current research projects we are interviewing foundations and investment intermediaries to explore ways to expand mission investing in rural communities. Another project involves informing policy makers and other stakeholders of existing policies and tax regimes that foster mission investing.

Our work with foundations over the past year convinces us that issues around creating internal capacity, working with consultants and identifying external capacity, building mission-specific investment infrastructures, and integrating mission investing into existing or new investment strategies, are all key issues in this next phase of field development. It is our ultimate goal to increase capital to mission investments and inform foundations about this growing field and the spectrum of investable opportunities across asset classes and geographies.—Susan Arterian Chang can be reached at [email protected].


1. For more information about the history of the PRI see:http://www.irs.gov/charities/foundations/article/0,,id=137793,00.html. For a directory that includes data on foundations active in PRIs see http://foundationcenter.org/marketplace/catalog/product_directory.jhtml?id=prod10021

2. For examples of pooled investments see RSF Social Financehttp://rsfsocialfinance.org/services/investing/pri/ and Living Cities –Catalyst Fund athttp://www.livingcities.org/investment/vehicles/catalyst-fund/

3. For more detail on The Northwest Louisiana Community Development Fund see More for Mission September E-Journal (Issue 3): http://us1.campaign-archive.com/?u=e869301b6eeb4826b6f13d334&id=9ad775319f&awesome=no

4. For more information about creating a mission investing policy seehttp://www.moreformission.org/page/11/mission-investing-policy and http://us1.campaign-archive.com/?u=e869301b6eeb4826b6f13d334&id=4b6258eba4

5. The More for Mission website lists a range of consultants athttp://www.moreformission.org/page/12/consultants

6. For examples of new mission investing products see “Launch of US Community Investing Index Strategy,”http://www.moreformission.org/blog/item/2009/12/14/launch-of-us-community-investing-index-strategy and “More for Mission Members Invest in ESG Emerging Markets Products,” http://us1.campaign-archive.com/?u=e869301b6eeb4826b6f13d334&id=4b6258eba4