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Our Impact Investing Approach

November 17, 2020

We’ve been working to put more of our assets toward our mission and are excited to share our new impact investing objectives. Impact investing gives us another way to do good, beyond making grants. It allows us to use our endowment investments to support organizations across our region, while preserving the amount we are able to give out as grants.

Our impact investing approach is focused on two goals: equity and place. All of our investments either advance equity in capital markets, support business development in our unique region, or both. Who we work with and how we fulfill these goals is just as important as these focus areas. We interview all potential fund managers about how they are embedding equity within their own processes, working on their implicit biases, and furthering diversity, equity and inclusion in their own firms. We also specifically seek out opportunities to partner with local banking institutions, and investments that focus on women and people of color.

Among our recent investments, Impact America is an example of an investment that fulfills our equity goal: founded and led by a Black woman, this fund supports BIPOC entrepreneurs serving low and middle-income communities. Granite Partners fulfills our focus on place: this fund was formed to keep Greater Minnesota businesses locally owned for the long term. As much as possible, we aim to achieve both our equity and place goals with our investments, which Four Bands Community Fund is a great example of. This Native CDFI and 2013 Bush Prize winner, based on the Cheyenne River Sioux Reservation, will use our funding to support loans and grants to Native small businesses.

Unlike a grant, an impact investment is intended to be paid back over time. Many impact investments fill a funding gap for underserved communities — because they usually offer below-market interest rates, they are more accessible to small organizations than a typical bank loan. Our investments go to intermediary organizations that then provide the funds to their own communities, along with needed business and investment advice.

All of our 2020 investments were sourced by an open RFI process. In addition, we also participated in the Minnesota Council of Foundation’s Integrated Capital Recovery Program. By March 2021, we will have made 22 impact investments totaling $33 million. We aim to increase both the number of investments and the total amount in 2021 and beyond.

Read our impact investing statement and see recent investments