To achieve our mission, we need to ensure that all of our assets—both financial and non-financial—are deployed in a manner that helps people and communities help themselves out of poverty. We are therefore building a platform based on the following imperatives:
Our current Investment Policy Statement notes:
“All enterprises, regardless of tax status, produce both social and financial results, on a spectrum from positive to negative, including 'neutral.' Their financial and social performance is measureable and varies over time. The conscientious investor takes note of both.”
With only one investment thesis, and a market that includes all kinds of enterprises and asset types, it’s unreasonable to maintain two segregated staffs with separate missions, skill sets and world views.
Heron eliminated the distinction, and now has one staff dedicated to deploying the foundation’s assets for mission. This includes not only our financial capital, deployed through a wide variety of vehicles, but also social capital such as time, relationships and knowledge.
As a philanthropic institution, we have a fiduciary duty to understand the impact of all our assets on society and to make decisions in light of that knowledge.
While this impact can be hard to ascertain given current data availability, we have examined all of the enterprises in our portfolio to discover at a high level their performance, financial and social.
We have started tracking our financial and social performance across all legal forms of business (nonprofits, for-profits, cooperatives, partnerships, public companies, governments, and more) and benchmarking them against comparable organizations.
Again, this effort is impeded by data availability, but we are actively investing in enterprises that will improve data transparency and standardization.
We have a strong incentive to share underwriting and follow trusted partners into deals. Collaboration, syndication, and the use of funds and managers are not merely desirable for mission reasons but mandatory for financial reasons given our relatively small operation.
We therefore are developing, with others, data infrastructure, comparable performance analyses, certification protocols, investment vehicles, standard documentation, cross-mission financial vehicles, and the like, to stimulate and enable co-investment and reduce transaction costs.