Spring 2022

Tips on Charitable Giving: Investing with Purpose

Millions of grant dollars leave The Dayton Foundation every year to benefit and support charitable work in Greater Dayton and beyond, but making donations isn’t the only way to support a good cause. Donors with invested funds at The Dayton Foundation have the opportunity to leverage their charitable dollars and provide additional resources, all while growing the value of their gift.

You’ve probably heard the terms “social impact investing” and “socially responsible investing.” Socially responsible investing applies screens to a group of publicly listed securities. For example, you may want to invest in a mutual fund that avoids investments in tobacco or alcohol. Social impact investing goes beyond a passive screen by actively seeking companies or projects that have the potential to create positive economic, social and/or environmental outcomes.

While once considered more radical and less lucrative ways of investing for donors with larger portfolios, socially responsible and social impact investing have become very popular, attainable and profitable investment options. Individuals who choose these types of investments don’t just use typical metrics like performance and expenses, but they also look at the underlying company revenue sources and make sure they align with their personal values.

Both socially responsible and impact investment decisions are intended to generate measurable positive social and environmental impacts, alongside risk-adjusted, market-rate financial returns. We know the value of these types of investments and can help you choose a portfolio screened with a variety of values that may be important to you, such as racial equity, environmental footprint, Catholic values and more. Additionally, donors who meet specific fund minimums have the opportunity to customize their investment portfolios to their specific interests and goals.

Social impact and socially responsible investing options are available with any type of investment, charitable or not. Here are some tips if you’d like to explore your options for your personal portfolio or your invested fund with The Dayton Foundation.

Step 1: Learn the language.

Having the basic understanding of the terminology will help you evaluate your options. From index funds to venture capital funds, the choices for socially responsible and social impact investing are vast. One of the Foundation’s approved investment advisors, Morgan Stanley, offers an informative guide on this topic at morganstanley.com/articles/investing-with-impact.

Step 2: Determine your area of focus and start the conversation.

Do you have a passion for advancing women and girls or supporting minority-owned businesses? Determine the type of impact you’d like to achieve, and talk to your financial advisor, spouse or other interested party to determine both the focus and the investments available to you.

Step 3: Start small.

With so many available options, it can be overwhelming. Starting small will allow you to get comfortable and more acclimated to the socially responsible and impact investing space.

For more information about socially responsible and social impact investment portfolio options available to you through The Dayton Foundation, contact Michelle Lovely at (937) 222-0410.

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File date: 07.26.23
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