Investment Strategy Update

More than forty years ago, we began aligning our endowment investments with our mission by choosing to invest in companies that aim to generate social and environmental benefits along with financial returns to support our grantmaking. We started with negative screens to divest from companies that were profiting from harm (e.g., tobacco and weapons manufacturers), expanded to proactively invest in companies that are building the better world we envision, and broadened further into direct investments like low-interest loans to nonprofits generating positive social impact.

Our approach hasn’t been perfect, but we are learning as we are doing. We recently joined the Net-Zero Asset Owners Alliance — a group of investors that have pledged to meet targets rooted in the latest climate science in order to reach net-zero emissions by 2050. We are now doing the work to align and refine our investments accordingly. We joined more than seventy groups to uphold the Due Diligence 2.0 Commitment, which supports processes and practices that catalyze movement of capital to BIPOC and women asset managers instead of adhering to historical industry standards for due diligence that reinforce social inequities.

We are deepening our commitment to this area of work in part because mission-aligned investment strategies work. It is possible to align all assets for positive impact and get competitive returns. For example, within the past five years we have seen an annualized positive return of between 7-13%. Even with fluctuations in return, we are financially positioned for the long-term while contributing to a more sustainable, better future. For example, we know that dismantling racial barriers unlocks economic opportunity that contributes to building a new economy that is inclusive, resilient, and prosperous. To this end, we are exploring investments with democratized and alternative ownership structures, within Minority Depository Institutions, and in companies that increase access to reproductive health, affordable housing, and financial technology. We see the unique opportunity that philanthropy has to provide the capital needed to build a new economy by supporting funds and organizations that counter mainstream products and practices and get resources to the hands of underserved and overlooked communities.

Some of the recent investments we’ve made include:

  • Common Future, a BIPOC-led organization that deploys capital to build community wealth, shifts powers, and builds equity
  • Bronze Venture Fund, a fund that invests in companies that eliminate disparities and promote equity
  • Raven Indigenous Capital Partners, a fund that invests in scalable, purpose-driven Indigenous-led social enterprise
  • Hope Credit Union, a community development financial institutional (CDFI) fund that provides loans in low-income communities in places like Mississippi where we focus our grantmaking
  • Rhia Ventures, an organization that aims to create systemic change and catalyze investments to improve reproductive and maternal health outcomes for women of color, low-income women, and others directly affected by systemic inequities

In addition to shifting our investment portfolio, we have shifted the cash accounts that cover grantmaking and institutional overhead to values-aligned banking institutions such as the Opportunity Finance Network, Stone Castle, Oweesta, and Amalgamated Bank.

Mission-aligned investing yields positive value to our organization beyond values alignment and financial returns. For example, our Investment Committee members have a deepened understanding that their fiduciary duty goes beyond monitoring investment performance and adherence to supporting investment strategies that increase positive impact on the communities we seek to serve, including Black and Indigenous women and women of color. For example, we recently developed a new Investment Policy Statement in close collaboration with our Investment Committee, our investment advisors, Tiedemann Advisors, and external reviewers, including two of our grantee partners, as part of our efforts to democratize investment approaches. We made the Investment Policy Statement publicly available to increase transparency about our investment directions and to encourage other asset owners to explore the policy statement’s approaches.

We are grateful to be a part of a growing group of foundations that are aligning their investments with their mission to advance equity and justice. We look forward to continuing to share our successes and challenges in this journey. Please reach out to our president Rini Banerjee ( to join us in our collective efforts.

Aligning our approach with movement needs

In our more than 70-year history, the Jessie Smith Noyes Foundation has consistently adhered to values and priorities that address the country’s most challenging social problems. We’ve changed as the world has changed, but we’ve never wavered in our commitment to equity and justice. Even as we continue to live through a national reckoning with injustice and white supremacy coupled with a global pandemic and threat to democracy, we have a responsibility to act and repair hundreds of years of harm and discrimination to Black and Indigenous people and people of color. As funders, we must reverse and address the overwhelming underinvestment in these communities from the philanthropic sector.

While we will continue to evolve our approach to meet the needs of movements, I’m excited to share several strategic shifts that we’ve started to make based on feedback from the field to better support our grantees.

  • Fund intersectional organizing
    While we have always funded grassroots organizations led by the people most impacted by injustices — particularly Black, Indigenous, and people of color — as they have the lived experience of being disenfranchised by unjust systems and have the clearest view of solutions, we had for many years done so in a siloed way. As of 2019, we began to fund intersectional organizing — organizing on multiple fronts, not single-issue programmatic silos — to advance racial justice and gender justice. We also expanded our focus to include a grantmaking budget specifically for Indigenous-led groups.
  • Shift to place-based grantmaking
    We are also beginning to concentrate the impact of our grants by working in partnership with communities in a limited number of geographic locations, particularly New York and Mississippi. Since our founding, we have been supporting partners in New York City where the foundation is based, and now we have expanded beyond New York City to support the robust ecosystem of statewide grassroots organizing efforts. Philanthropy has historically overlooked and under-resourced the US South, and we are beginning to more deliberately funnel resources to this region. We are also working with a select group of national partners who support the work of place-based partners through building the capacity of local leaders, fostering cross-state collaborations, and bridging the organizing work at the state and local levels into regional and national movement infrastructure.
  • Provide larger, multi-year grants
    Historically, we have supported our partners year after year, but we are being more intentional in providing multi-year support while also exploring ways to increase our grant amounts. At the end of 2020, our Board approved an increased payout to double our grantmaking budget to $4 million to better support partners to fulfill their missions over the long term.
  • Couple grants with investment capital
    For the first time, we leveraged our broader endowment to provide a grantee partner, Higher Purpose, with a $100,000 loan guarantee to unlock capital from Hope Credit Union to support Black women entrepreneurs in Mississippi. Through these efforts, we provided an integrated stream of resources to priority places not just through grantmaking, but also with investment capital. We believe that we need to leverage all of our resources to support the work of our grantee partners.
  • Support the broader movement ecosystem, grantee-driven capacity support, and healing justice. 
    In response to the ongoing needs of partners, we will launch a $500,000 flexible grantmaking mechanism in Spring 2021 to support emerging and unforeseen opportunities for new and existing partners, including grantee-driven capacity support and healing justice as a way to aid partners in confronting trauma and centering well-being. This new part of our work was informed by our COVID-19 emergency relief rapid response grants to nearly three-quarters of our existing grantee partners in 2020. We have also earmarked a portion of our core grantmaking to specifically support Black and Indigenous-led networks and coalitions to strengthen the ecosystem of movements advancing racial justice and Indigenous sovereignty.

While we have made some important changes, we will continue to grow and learn in community with you all. Thank you for being a part of our journey to become a stronger and more effective organization — a journey that builds on the strength of our past and is full of opportunity for the future. As Amanda Gorman said in her inaugural poem, “For while we have our eyes on the future, history has its eyes on us. This is the era of just redemption.”

In solidarity,

Rini Banerjee

Moving forward together to advance equity and justice

Despite the pandemic and deliberate barriers to prevent Black and brown people and new Americans from casting their ballots, voters have done our job and turned out in record numbers fighting for an America that works for all of us. We have witnessed the power of people to uphold the basis of democracy as voters have decided the future leaders of our country.

We are grateful to our grantee partners and other grassroots organizations led by Black, Indigenous, and people of color whose brilliant organizing strategies across issues, race, and place ensured the interests and needs of our communities were heard.

They have been leading long-standing work to advance equity and justice while ensuring the safety and long-term resilience of frontline communities for years — and 2020 has magnified the importance of their work and what’s at stake. They organized to provide mutual aid in their communities during a pandemic. They organized to push back against racial injustice across the country. They organized to get out the vote. They are extraordinary.

It is our privilege as a gender justice and racial justice funder to continue to support the leadership of these organizations in these moments and into the future. To this end, we join our partners in the call to affirm that the will of the people prevails and swear in the leaders that voters chose to move us forward together to make the world we want.

In solidarity,

Rini Banerjee

Unleashing the Power of the 95%

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In the early 1990s, I was a junior financial analyst for Citibank. I just graduated with a Bachelors degree from New York University, Stern School of Business and was ready to hit Wall Street. Back then there was no impact investing field, no Environment, Social, and Governance (ESG) investing and no conversations on how extractive financial practices enable deep poverty and inequity. I didn’t last that long in my job. I needed and wanted to work in a field that actually creates long-term systemic impact that stays accountable to the communities they aim to serve.

The last eighteen years, I have been working in the social justice philanthropic field and have done significant donor organizing to push the needle in funding women, girls, and LGBT rights in the U.S and globally. Most of the institutions I have worked at have tried to do their grantmaking with integrity and accountability.

The progress has been slow and steady to unlock more funding for social justice organizations to do the deep work of ending structural injustices. But it is now time for philanthropic institutions to look internally and at their endowments where 95% of its wealth is locked up, and unleash its potential towards a more generative, sustainable, and just economy.

For the past thirty years, Jessie Smith Noyes Foundation has been at the leading edge of funding grassroots organizing in the United States. We are a philanthropic institution that keeps pushing the field to do better, whether it is in social justice grantmaking or aligning its endowment towards social justice goals. At Noyes, we have a mantra that the activation of our endowment — the 95% of our investment capital — MUST be mission-aligned. This concept isn’t the norm because many foundations believe that mission-aligned investing doesn’t equal increased financial return and will diminish its asset base.

However, there are numerous studies that have shown that impact investments can outperform the market. Demand for socially responsible funds and investments are also being driven by many millennials with wealth who are demanding their traditional wealth managers to look at these financial vehicles. At its core, the impact investing field is trying to bring finance back to balance that seeks a socially and environment just society.

I believe justice-oriented philanthropic institutions that aren’t using a mission-aligned investing approach are obstructing the effectiveness of the social justice field.

At Noyes, we seek to invest our $65 million endowment in companies that provide commercial solutions to major social and environmental problems and/or build corporate culture geared toward advancing equity, opportunity, and community.

The Foundation will consider:

  • The environmental impact of a business by its use of materials, generation of waste, and the goods it produces or services it provides;
  • Issues of corporate governance, including selection of directors, role of independent directors, diversity on the board and executive team, compensation policies, relations with labor unions, employee benefits programs or other demonstrated commitments to the well–being of all individuals involved in an enterprise; and
  • A corporation’s openness and accountability to all stakeholders, its local job creation, its corporate giving to and active involvement with community organizations, or its other initiatives that provide net benefits to the local economy.

With the fierce urgency of now, we’ve also leveraged our power as asset holders to push the investment advisor community to think more deeply and critically about how to advance the field of social impact investing.

In fact, in our recent search for a mission- and values-aligned investment advisor, we used the LOI process to pose questions to the investment advisor community about the future of social justice investing, and the appropriate strategies for achieving truly equitable returns. The Noyes board was hopeful that this search will help educate the Foundation on the state of the impact investing field and the options for an investment manager that can provide comprehensive services as well as secure involvement from the Foundation board and staff in investment selection and criteria that is mission aligned.

Given the accelerated pace of innovation and growth in the sustainable, responsible and impact investing field; we had an open call to the investment community to provide letters of interest as the first stage of our advisor search. We asked some critical questions in this phase:

  • What does “social justice investing” look like now and in the future?
  • What does corporate accountability mean in an era of globalization of capital and supply chains? How does this translate into portfolio selection?
  • How can our mission aligned investment portfolio drive the creation of systemic impact in the areas of social justice, equality, human rights, health, and diversity?
  • How can the practices and culture of our investment advisors and fund managers embody our values and mission of social justice and equality?
  • What investment resources do the grassroots social justice organizations, Noyes support need in order to develop sustainable and viable operations?

The board also decided to share the results of the broader field questions with the philanthropic and investment community. In June, we released a report of the key takeaways from our investment advisor search that provides a snapshot of the current state of the investment advisor community’s ability to integrate social impact into the investment process. At a high level, the process confirmed two broad observations about the world of investment advisors for foundation investments.

First, impact investing services are proliferating that combines traditional portfolio management discipline and access to products with commercial returns. This debunks the theory that impacting investing is niche.

Second, the investment advisor field lacks diversity whether internally and/or a diversity of managers in firms’ databases. The investment profession remains overwhelmingly white and has a way to go in reflecting the diversity of America, where the population of African-Americans, Hispanics, Asians and other people of color is growing. More than 79% of the 434,000 financial advisers in the nation are white with people of color representing 27.7% of financial analysts, 26.7% of accountants and 35.3% of tax preparers, according to U.S. Census data.

Ultimately, working with investment advisors will require active engagement and open communication about our aspirations for organizational change in the industry and our firm belief in social justice investing.

Noyes will have to continue to be a financial activist in the impact investing field and ask directed questions on race and gender, the social and environmental value-add of particular investment managers, and ways to engage low-resourced communities into the work to make it truly accountable and have real impact.

The urgency of now — from immigrant families being torn apart to the criminalization and divestment of low-resourced communities — compels the Noyes Foundation to keep pushing within our grantmaking and investments to become more committed, knowledgeable and skilled for justice and equity. I hope that anyone working on foundation endowment management will critically explore the full activation of mission aligned investing for long-term systemic change. Please join me on this investment journey to regenerate our land, invest in people powered solutions, and build a beloved community.

This post was written by Rini Banerjee, Interim Executive Director at Jessie Smith Noyes Foundation, and originally published as part of “Liberate Philanthropy,” a new blog series curated by Justice Funders to re-imagine and practice philanthropy free of its current constraints — the accumulation and privatization of wealth, and the centralization of power and control — to one that redistributes wealth, democratizes power and shifts economic control to communities. Throughout the series, we will be sharing stories from some of our most forward thinking, transformational leaders in philanthropy about how they are facilitating a Just Transition for philanthropy.