Impact Investing by Private Foundations

Imagine that your foundation is dedicated to eradicating childhood asthma in your home state. One day, you are listening to the local news during your morning commute and you hear a report about an aging coal-fired power plant where the sulfur dioxide emissions are so bad as to be implicated in the high incidence of childhood asthma in the neighboring towns.

A week later you are reviewing the foundation’s investment portfolio and realize that you own a good chunk of shares in an energy company—the very same energy company that owns the power plant. In fact, the dollar amount of the company’s stock in your investment portfolio is almost equal to the dollar amount you are putting into your childhood asthma eradication efforts.