More Than Money
Issue #40

Money and Relationships

Table of Contents

“Bang for the Buck: Creating Healthy Communities”

Investing Where It Counts

by Jane Gerloff, Ph.D.

Many of us, as individuals, invest strategically to create change. But can we say the same for the organizations we donate to?

You can if you have a donor-advised fund at the Vermont Community Foundation (VCF), says Faith Brown, its vice president for finance and operations. By mandating that 5% of its assets be invested in the Vermont communities it serves, the foundation is leading the way in how community foundations make their investments. "By investing some of our assets in Vermont, we're making a conscious effort to align our investment strategy with our grant making and our business model, so that we can better serve our mission of creating healthy, vital Vermont communities," Brown says.

The foundation's Vermont-invested assets reached $3.3 million by the end of 2004. 1 Currently, these investments are divided among community development financial institutions, a community-directed bond portfolio, and locallybased venture capital investments.

Goals for the Vermont investments program are more jobs, housing, economic development, and financial services for low-income Vermonters; a high social return, as well as a reasoned investment return; current as well as future impact; and promotion of the program in order to engage other Vermont institutions.

How have donors reacted to this investment initiative? "As a mission-based organization, our donors expect something more of us than they do from a for-profit investment firm," Brown explains. She adds that donors are comfortable with the VCF's new direction. The VCF is also beginning to look at the rest of its investments-the other 95%-as part of an overall plan to make sure its investments and mission are in alignment. "The way we see it," says Brown, "taking our mission into account when we decide how to allocate our investments is simply part of our fiduciary responsibility."


1 The VCF has statewide investment opportunities that match its mission as a statewide community foundation. Other community foundations might consider targeting community development differently, based on their own geographic focus.

For more information about the Vermont Community Foundation, visit www.vermontcf.org .


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