Amplify Your Impact Through Thematic Impact Investing Portfolios

As we emerge from isolation and a tumultuous year, we at CapShift have been inspired to see donors like you step up to support your communities and amidst the global response to the COVID-19 pandemic. Nonprofits and businesses, large and small, have gone above and beyond to respond to a year filled with tragedy and crisis, amplifying their impact, often with fewer resources and at a greater cost.

CapShift works with NPT to help amplify the impact of your donor-advised fund (DAF). The easiest first step is to review the investment allocation of your DAF, likely made when you opened the account.

Portfolios for Major Impact

In 2019, NPT launched several thematic portfolios: Gender Lens, Environmental Stewardship, Economic Mobility and Broad Social Impact. The portfolios seek market rate returns through a combination of active fund managers looking to beat their benchmarks and passive funds looking to track their benchmarks at a low cost. Each includes a diversified group of funds that invest directly in companies going above and beyond on social and environmental good. This could mean increased employee benefits, improved diversity and inclusion practices or a significant focus on resource conservation and clean technologies. Equally important, the fund managers who direct these investments push management teams to do more, whether it be increasing diversity in hiring and advancement, reevaluating executive compensation or reviewing and reducing a company’s carbon footprint.

While your DAF is invested in one or more of the NPT thematic portfolios, those dollars have the potential to not only grow, but also to be put to work promoting positive environmental and social change before they are used for grantmaking. As an added benefit, each of these portfolios is fully liquid, so if you want to make a grant, you can do so quickly and efficiently deploying capital where it’s needed most.

Customized Impact Investments

To further amplify impact, NPT offers curated, customized impact investments. These private investments seek to provide a financial return, but often have a more direct impact on local communities or the environment. Each investment is different, so it’s best to explain through a few examples:

• One current private impact investment provides emergency loans to nonprofits facing business disruption and lost revenue due to COVID-19. This fund provides capital to keep the nonprofit afloat until it can rebuild grants and program revenues. This is a great complement to a granting strategy that provides support to local community centers or homeless shelters.
• Another opportunity is to fund the purchase of solar and wind farms to accelerate our country’s shift to renewable energy. One fund available for investment has a growing fleet of 35 wind and solar assets. These renewable energy assets abate 1.4 million metric tons of carbon dioxide annually, equivalent to the amount of greenhouse gases emitted by over 300,000 passenger cars in a year.
• DAF donors may choose to recommend an investment in the UNICEF Bridge Fund, which accelerates the delivery of life-saving medical supplies, including personal protective equipment, to help save the lives of children and frontline workers in Africa, Asia, South America and Central America.

This is just a small sample of potential private impact investments. While subject to NPT review and approval, the range of impact DAF donors can make by recommending investments into customized impact funds is vast.

Donors with a DAF have made an important first step to supporting charities in need. Making additional contributions to your DAF is a great step to continue that support. For maximum impact, look at the investment holdings in your DAF and consider expanding the impact with thematic portfolios or customized opportunities.

The teams at NPT and CapShift welcome the opportunity to offer our support as you consider your investment decisions for these important philanthropic assets.

About CapShift

CapShift is an impact investing platform that empowers philanthropic and financial institutions, along with their clients, to mobilize capital for social and environmental change.

About Adam Rein

Adam co-founded CapShift and leads the team’s day-to-day operations. Since 2014, he has served as a Managing Director for MissionPoint Partners, an impact investment advisory and asset management firm. Adam has an MBA from MIT Sloan, an MPA from the Harvard Kennedy School and a BA from Yale University.

NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.

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