For Fundholders, ESG Investing Lets You Make an Impact Right Away
I have a charitable giving fund with Foundation For The Carolinas and routinely make annual contributions. My goal is to accumulate a large enough balance to make substantial – and impactful – grants to nonprofits in the future. I’ve seen the balance of my giving fund grow, but I won’t be ready to make grants for at least a few more years. Is there a way for the dollars in my fund to make a positive impact in the meantime?
– Planning for Impact
Thank you for the thoughtful question! For individuals who open donor advised funds – which can be established at FFTC for as little as $10,000 – giving back to the community through grantmaking is front of mind. A donor advised fund allows you to conveniently support your favorite nonprofits and causes each year. In addition, the balance of your fund is invested in a way that aligns with your goals – whether to maximize the long-term growth of your giving assets, preserve your assets for shorter-term giving, or something in between.
So what if one of your goals is to grow your fund and recommend larger grants in the future? What options do you have for investing your fund assets in an impactful way before they are granted out?
If you’re eager to make an impact while your fund is in the appreciation stage, the dollars in your fund can be invested in companies that consider Environmental, Social or Governance factors when making decisions. Some refer to this concept as “double impact.”
For instance, your fund can be invested in for-profit businesses that have a plan to reach net-zero emissions or increase gender parity in leadership roles. With an FFTC Donor Advised Fund, you can recommend that your fund be invested in our ESG Long-Term Growth Pool. In addition, depending on the fund balance and time horizon, FFTC may be able to help you make an impact investment in our region addressing important causes such as affordable housing.
In an ideal scenario, the fund can grow at a market-like rate of return, but the underlying investments can have an impact in the local community and potentially beyond. And then when you are ready to make grants, you can work with FFTC to identify nonprofits that similarly align with your values.