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How We Invest

We believe McKnight’s four-point framework can help any investor contribute to a truly resilient economy.

It is a practical framework that can be scaled up or down depending on financial and human resources, and it can assist experienced impact investors in flexing the muscle of their entire endowment.

The McKnight Foundation grants over $85 million a year to support nonprofit organizations working toward socially, economically, and environmentally sustainable communities. We will invest at least $200 million in investments with higher positive impacts. And we are finding other exciting opportunities to leverage our $2.2 billion endowment with our mission. Approximately $1 out of every $3 we invest is aligned with McKnight’s mission.

Our approach is organized around four points of leverage:

Asset Owner

We are an owner of assets deploying millions of dollars into public and private markets.

Customer of Financial Services

We are a consumer of financial products and services that can promote integrated thinking on environmental, social, and corporate governance (ESG) issues among the asset managers we hire.

Shareholder of Corporations

We are a shareholder of corporations that votes company proxies and raises questions about ESG practices, strategy, and risk management.

Market Participant

We are an institutional investor that works with others to source deals, create better market conditions, and share successes and failures related to our portfolios.

A Focused Strategy

Our impact investments must closely align with the goals of our two priority grantmaking areas: Midwest Climate & Energy and building equitable and inclusive communities in Minnesota, an emerging program that will announce its program guidelines in fall 2020.

At this stage, we are making investments in the United States only.

Internal Oversight

Guided by our impact investing policy, the impact investing program is led by program director Elizabeth McGeveran. Investment decisions are made by the Mission Investing Committee of the board of directors, which includes three members of the Investment Committee and one additional director. This committee makes the final decision on all investment ideas and works in close coordination with our Investment Committee for portfolio coherence.

Partners

Imprint Capital, a division of Goldman Sachs Asset Management, is our primary service provider, advising the Foundation and conducting due diligence on public and private funds, direct investments, and some program-related investments (PRIs). Imprint’s team also serve as an important thought partner for McKnight. We also work with other foundations and institutional investors informally and through more formal collaborations. In particular, the Investor Network on Climate Risk has been a valued resource on climate change, as has CDP.

“Climate change has the potential to undermine the value of the McKnight endowment. Incorporating a long-term understanding of climate change — its causes and its solutions — is part of protecting the returns of the endowment.”

source: The Road Through Paris: Building a Low-Carbon Economy with Investing and Philanthropy

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