Evolving Philanthropy: Innovative Approaches to Social Investments

Categories: Donors, Leadership,

For more than 40 years the Community Foundation of Sarasota County has developed relationships to help build and enhance our community through charitable giving. Along the way, we have had the great privilege to work with donors who continue to dream about opportunities for this great area we call home and all who live here. How those opportunities come together is constantly evolving, but our reason for all our work holds constant: we are guided by the belief that by coming together, our collective generosity can support causes that create the community where everyone feels respected, engaged, motivated, and valued.

New Fund Investment Opportunities

Like all future-focused organizations, the Community Foundation’s financial strength has been guided by achieving long-term sustainability. In addition to donors choosing to have their charitable funds invested within a mix of long-term investment pools, the Community Foundation’s investment committee recently approved a new option for donor fund holders. This new option, called the Environmental, Social, Governance (ESG) pool, is a long-term investment strategy that focuses on a portfolio of funds consisting of equities and bonds that consider additional ESG factors in their investment decision-making process. This is a growing investment category known by various names that attempt to align personal values with investments.

The Community Foundation’s ESG pool currently is comprised of a Northern Trust Global Sustainability Index Fund, a TIAA-CREF Social Choice Bond Fundand a TIAA-CREF Social Choice Equity Fund. The fund is managed by Northern Trust and the Investment Fee is approximately 0.14% (14 basis points).

“This option is recommended for endowed funds or funds with seven or more years of investment time horizon,” said Laura Spencer, Chief Financial and Administrative Officer with the Community Foundation. “At the same time, it provides donors an opportunity to align their investments with their values.”

Innovative Approaches to Social Investments

Charitable giving in our community is ever progressing as each donor has their own experiences that set their visions of personal or family philanthropy philosophies.

“Getting to know individuals and families and learn about the results they hope to see from their philanthropic investments and personal legacies is particularly rewarding,” said Betsy Pennewill, Corporate Counsel for the Community Foundation. Pennewill, with experiences in corporate banking, real estate, and estate planning, works with donors and professional advisors to develop results-focused charitable giving plans and agreements.

Pennewill says she is currently seeing more donors with expectations of a return on their charitable investments. For example, in fall 2019, an anonymous donor granted $200,000 to fund a pilot program for solar investments. The program offers low-interest funds to Sarasota County-based nonprofit organizations to improve energy sustainability at their facilities. As the low-interest funding is paid back, this anonymous donor will use it to fund community-wide education projects about energy efficiency.

“Through this pilot, the donor’s goal is to reach new, measurable milestones in local sustainability,” Pennewill said.

The Community Foundation’s board of directors is also supporting Program Related Investments (PRI) made through charitable funds. This past summer the board approved a capstone investment loan of $2 million in a $33 million real estate development in Sarasota’s Rosemary District supporting affordable and workforce housing. Led by the Sarasota Housing Authority, this project, which is known as Lofts on Lemon, aligns with the foundation’s two-generation approach to investing in families to generate social returns in housing, career development, and education. The funds committed to the project will be repaid after 15 – 18 years at below-market interest rates.

“There are tremendous opportunities to use the Community Foundation’s capital beyond grantmaking to achieve a social and financial return,” said Roxie Jerde, President and CEO of the Community Foundation. “Our board is guided by our values, and through innovative means is funding projects today that will have long-term impacts in our community. Lofts on Lemon will ensure its residents will be able to reprioritize family budgets thanks to limitations on rent-to-income calculations, allowing families to improve their financial stability.”

Learn more about innovative approaches to social investments.