Field Notes: Reinventing Philanthropy for the 21st Century

The Aspen Institute has released a report on Impact Investing featuring an essay written by Heron president Clara Miller.


A recent report by the Aspen Institute explores Clara Miller’s history at Heron and our journey to commit 100 percent for mission. Miller came into Heron seeking to reinvent what a foundation can be in the 21st century by critically asking if and how our work aligned with our mission of helping people help themselves out of poverty. One question that came out of this conversation was, “What can we do to better impact jobs?” This led Heron to look at the economy holistically and re-imagine our role within in:

All the assets of the foundation, across enterprise types, would be dedicated to mission. And when you declare that, as the basic fiduciary responsibility of a philanthropic institution, it changes other things. For example, it calls into question why you would have two staffs — a relatively small one making very large conventional investments and a larger one making small grants. Why not combine those into one staff making the best use of foundation dollars to achieve its mission?

I think that making a distinction between mission and non-mission investing in “good” or “bad” enterprises can create a lot of practical and philosophical havoc. And at Heron I thought we could avoid that by consolidating both mission and non-mission investing — in one capital deployment effort. After all, the enterprises creating jobs and value are not exclusively nonprofit by any stretch, and if we were going to do all mission investing, across enterprise types, we needed to assess and track all investments the same way. And the skills required in investing funds in an enterprise are very much the same whether you are doing something social or something “anti-social.”

Heron’s approach acknowledges the reality that we cannot do it alone, which is why we work with various enterprises, platforms, and institutions to create a more economically inclusive and thriving society.

If every foundation in the world put all of its investments into impact investing, it would still amount to only about 1 percent of the assets under management. So we have to think of ways to be influential outside our own terrariums.

We have to be part of the larger supply chain, the larger set of interactions available by investing with others across the spectrum — banks, foundations, individuals, private equity firms, and government on the investor side, and public companies, small businesses, governments, cooperatives, and nonprofits on the enterprise side. If our investment objectives favor companies with great financial and social performance, taken together, we will be influential if we find and back them and they succeed. We then gain standing to guide capital toward value for all.

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