Mission Aligned Framework for Investing
Mission Aligned Framework for Investing: Maximizing the impact of the W.K. Kellogg Foundation’s Mission Driven Investment Portfolio
Authors: Sophie Lawrence, Thomas Cobti, Sakis Kotsantonis, George Serafeim
Impact investing is an exciting, fast-growing field that can generate both social and financial returns to create equitable opportunities for all. However, its full potential has yet to be realized. For that to happen, impact investors need to adopt a systems perspective when allocating capital versus a deal-by-deal approach. Only by adopting a systems perspective can investors catalyze truly disruptive change.
“Our goal, with our mission-related investments, is to strategically disrupt the status quo in capital market practices – to drive capital to low-income communities and communities of color in order to widen pathways of opportunity,” said La June Montgomery Tabron, President and CEO, W.K. Kellogg Foundation.
The imperative to disrupt and catalyze positive change has guided the W.K. Kellogg Foundation to expand their innovative work and deploy more of their endowment for impact through the creation of their Mission Driven Investment portfolio. The Mission Aligned Framework for Investing, introduced in this report, is a management and governance tool created by KKS Advisors on behalf of the Kellogg Foundation and seeks to help mission-driven investors in four ways:
First, as an assessment tool for spurring systems-level impacts during investment due diligence.
Second, as a diagnostic tool post-investment to understand portfolio level interactions and synergies across investments.
Third, as a monitoring tool for assessing whether investees are delivering the anticipated impact.
Fourth, as a collaboration tool where different teams working across investment and philanthropic projects could have a platform for cross-learning, information exchange and collaboration.
While there are tremendous data deficiencies plaguing the field, we find promising pathways for aligning mission and investments with rigor. Therefore, the framework is evidence-based, and research driven. It focuses on the assessment of the following four categories: alignment and evidence, measurement quality, scalability of impact and potential for disruption. We apply the framework to three Kellogg Foundation mission-related investees to verify and showcase its practicality and decision usefulness. This could not have been done without the help of the investees, who provided us with valued insights, data and time.
The framework can enable all types (e.g. large, small, above-market, below-market, etc.) of mission-oriented investors to better weigh up alternative opportunities for impact in the marketplace. Although originally developed for the Kellogg Foundation’s Mission Driven Investment Portfolio, the learnings and approach are designed to be applicable to any impact investor.