Philanthropy and investing are often thought of as two very separate disciplines—one dedicated to driving positive social change; the other focused solely on generating financial returns. However, the rapidly growing field of impact-first investing demonstrates that these two areas can complement each other.
In this Q&A with the Trust’s Kristin Carlson Vogen, senior director of philanthropic services, and Leah Missbach Day, co-founder of the nonprofit World Bicycle Relief and a donor advised fund (DAF) holder at the Trust, we explore what impact means on an organizational and individual level, and how charitable dollars can make a difference beyond grant making.
Q: What is the Trust’s approach to impact investing?
Kristin Carlson Vogen: We are early in our process. Adopting an impact-first approach to a 100+ year tradition of focusing on financial returns first takes time. After more than a decade of intentionally seeking diverse asset managers, nearly 32% of our growth pool is now invested with women or minority-owned asset managers. We also heard from advisors of our donor advised funds that they wanted more direct opportunities to have their fund assets invested for change locally, regionally, and globally. A survey revealed that helping our region, supporting minority entrepreneurs, and investing in renewable energy were the areas of greatest interest. We launched our Impact Investing Program in 2020, enabling donors to recommend investments through loans to Community Development Financial Institutions (CDFIs), ESG public equity funds, and other investments that align with their philanthropic interests.
Leah, as a donor advised fund-holder at the Trust, what drew you to the Impact Investing Program?
Leah Missbach Day: My relationship with the Trust started with setting up World Bicycle Relief—which designs and builds bikes specifically for students and healthcare workers to reduce their travel times in remote villages in rural developing countries. Originally, the Trust was the holding bank until we established our own 501c3 nonprofit.
Later, I had an opportunity to open a new donor advised fund at the Trust in my name. My philanthropic advisor, Molly Rand, presented the option of investing the assets of the DAF in impact-focused opportunities. The Impact Investing Program was very exciting to me. I need to have my philanthropic dollars working and getting out into the community. But the dollars in my fund that are waiting to be granted, I want them to be effective too. It means a lot to me to know the money is doing good supporting causes aligned with my values.
Q:What investment options have you chosen to support?
LMD: I selected four different opportunities through the Trust’s impact investing platform: two focused on financing affordable housing and community development in Chicago neighborhoods; one focused on advancing economic equity in rural regions around the world; and a U.S.-based equity fund that applies an Environmental, Social, and Governance (ESG) strategy. The local options really resonated with me and reinforces just how wonderfully Chicago-focused the Trust is. Honestly, it helps me sleep at night knowing there are experts handling these funds who are committed to making them as effective as possible and are also going to support equity and justice in how they invest these dollars.
Q:Why is advancing social priorities through investing an important strategy for the Trust?
KVC: As a community foundation, our fiduciary responsibility is to support a thriving and equitable Chicago region. This obligation does not start and stop with our grant making. The Trust oversees more than $4 billion in assets—understanding and influencing how these assets can be invested for the greatest good will advance our and our donors’ priorities before a grant is even made. When we invest in small businesses locally and in other parts of the world, provide low-cost capital to Chicago entrepreneurs, and find ways to invest in renewable energy, we are using all of the tools in our toolbox to be changemakers.
Q:Leah,what broader vision or impact do you hope to achieve through your giving?
LMD: I believe it is critical to use one’s resources in productive ways beyond direct giving. Martin Luther King Jr. sums up one important aspect of this idea when he says, “Philanthropy is commendable, but it must not cause the philanthropist to overlook the economic injustice that makes philanthropy necessary.” When we think of the “bottom line,” that should expand beyond profit to include practices that support human capital and advance equity.