Exploring a New Approach to Mission-Aligned Investing: Integrated Impact Investment

Leena Bhutta, the chief investment officer for the Doris Duke Foundation, is leading the charge in redefining mission-aligned investing in a polarized investment landscape. In a time where social media, politics, and investment strategies are all intertwined, Bhutta’s approach to integrated impact investing is gaining attention.

The Doris Duke Foundation’s impact investing program, launched in 2019, aims to invest up to 10 percent of the endowment over 10 years in investments that align with the foundation’s mission areas. This includes supporting initiatives in performing arts, medical research, environment, child well-being, and building bridges. The foundation’s experience over the past five years has led to a new approach that focuses on maximizing mission-aligned impact across all assets and activities.

One key aspect of this new approach is the concept of integrated impact investing, where all members of the organization become impact investors. This means that both the investments team and programmatic side of the organization work together to align financial returns with impact objectives. By removing the “hazy middle” of suboptimal investments, the foundation aims to create a more coherent and impactful investment strategy.

However, there are challenges to implementing mission-aligned investing, especially when it comes to accepting concessionary returns. Balancing the need for impactful investments with the long-term health of the endowment requires careful consideration and governance structures. Effective mission-aligned investing also requires organizational buy-in, continuous learning, and a commitment to rigor.

For investment teams looking to start on the path of mission-aligned investing, dedicating research time to areas with potential impact and financial returns, modifying investment processes to be more inclusive, and designing flexible portfolio constructions are key steps.

In conclusion, incorporating mission and values into investment programs for mission-oriented organizations is a challenging but necessary endeavor. With a focus on integrated impact investing and a commitment to long-term goals, organizations like the Doris Duke Foundation are paving the way for a new approach to investing in a polarized world.