The has announced that it will allocate $150 million to by the end of 2022.
Defining social impact investments as "opportunities that align social good with financial return to bring about social change," the foundation has pledged that the investments will neither replace nor reduce its grantmaking in other areas, which last year totaled more than $100 million. The new impact investment program will include four primary vehicles: recoverable grants, which, unlike loans, will be forgivable if necessary; program-related investments; mission-related investments, including environmental and sustainable impact investments, housing development investments, and start-up financing for entrepreneurs; and the foundation's socially responsible investment (SRI) pool.
The latter comprises fossil fuel-free public equities screened for social and environmental responsibility and gender diversity, with a place-based emphasis on Cleveland-area corporations. Launched in 2017, the pool has increased in value from $500,000 to $44 million — and is the best-performing portfolio at the foundation over the past two fiscal years. To ensure that the portfolio is focused on gender and racial equity, the foundation will require that all boards and executive teams of companies in the pool include female and minority representation and will actively seek investment managers that are at least 50 percent minority- and/or women-owned.
"[This announcement] represents a significant moment in our organization's history and a proud point in time for community philanthropy to demonstrate fiscal leadership while taking innovative steps to meet the growing needs in our local community," said the foundation's senior vice president and chief financial officer Roseanne Potter. "When combined with our traditional grantmaking efforts, the social impact investing program amplifies our place-based impact in greater Cleveland and invites new partners to join us in creating an environment for success for everyone we collectively serve."