As part of our strategy to maximize the benefits of our investments, we aim to generate a triple bottom line of: financial returns, environmental and social impact, and deep learning.
Each investment has a targeted financial return that meets our fiduciary standards. Half of our impact investment portfolio must return in line with standard market expectations; another quarter has a slightly concessionary return expectation, and the remaining quarter will be in program-related investments (PRIs), which are defined by the IRS as non-commercial investments with a charitable purpose.
Environmental & Social Returns
Each investment contributes to solving social and/or environmental challenges in unique, inspiring ways. We seek investments that create affordable housing, help build the sustainability of our metro region, increase energy efficiency, promote the distributed generation of electricity, reduce chemical inputs in commercial agriculture, or preserve grasslands and wetlands.
Annual impact reporting provides a more comprehensive picture of the success of the business. We collect data to better understand the critical social and environmental value created by the funds and businesses where we invest. We aim to keep measurement requirements simple, useful, and sustainable.
Each investment provides deep learning to the Foundation about market gaps and opportunities, as well as private-sector solutions. Investment and grantmaking staff work closely to capture and institutionalize these insights. We hope that market experience contributes to better, smarter grantmaking. In addition, just as we've benefited from the knowledge and experiences of others, we see it as part of our mission to share our learning returns.
“A growing body of evidence ... supports the premise that you do not have to sacrifice financial return — and may potentially enhance it — by incorporating ESG (environmental, social and governance considerations).”
— Kate Wolford, president
The McKnight Foundation
Photo Credits: (Top and bottom right) Courtesy of NCIF