MRIs Help Move More Money to Mission

We’ve reworked how we do mission-related investments (MRIs) to drive more dollars to the communities we serve.

We believe in using  more of our endowment to advance our mission so that people’s opportunities and outcomes in life aren’t determined by their race, where they live, or how much money they have. That’s what we mean when we talk about justice—all people should have the opportunity and the tools they need to thrive. This commitment shows up in our grantmaking and also in how we invest our endowment.

We’ve recently reworked how we engage in impact investing, which uses endowment investments to create positive social impact along with financial returns. Impact investing allows us to move more dollars, more quickly, into the diverse communities we serve, while continuing to grow our endowment. We’re excited to share how this updated approach brings our investments into deeper alignment with our mission, and how it’s already exceeding expectations.

We’ve changed our approach to impact investing, including MRIs.

Our 2030 impact investing strategy includes both mission-related investments (MRIs), which are financial investments that generate market-rate returns while supporting the aims of our grantmaking, and program-related investments (PRIs), which are low-interest loans aligned with our grantmaking. In addition to using these investment tools, we invest in diverse asset managers who reflect the communities we serve, and we’re improving our understanding of how environmental, social, and governance (ESG) factors can inform our future decision-making. This overall strategy enables us to use our assets to support justice, equity, diversity, and inclusion (which we refer to as JEDI) in communities.

We used to focus MRIs on private investment opportunities that aligned with a prior grantmaking strategy to create good jobs and increase financial capability. That is, we made investments with private managers that sought to produce jobs with good pay and benefits and improved financial well-being for communities we serve. We found the strategy worked but was limited in scale. Unlike public equity, which involves owning stock in companies listed on a public stock exchange, private equity takes time to deploy and even more time to offer a return on investment. Plus, our investment policy’s allocation to private investments is limited to 26 percent of our endowment because of liquidity requirements.

In 2023, our CFO Ramya Rauf, Krissy Pelletier from our investment consultant NEPC, and our board’s investment committee collaborated to redefine our MRIs to include both private and public investments. The result? Moving more capital, more quickly, into impact investments that meet our financial goals.

“We’ve shifted our approach from exclusively what we’re investing in to who we’re investing with,” says Rauf. Our new MRIs are placed with investment managers from, or making investments in, the diverse communities we serve, as a way to increase the flow of resources to those communities.

“This new approach allows us to address the capital investment gap, where less than one percent goes to investment managers from Black communities, even less to Native communities,” says Rauf. “The way we see it, investing in diverse communities is the impact we seek.”

It also builds on our long-term commitment to Native-led organizations, which receive about 40 percent of our grant dollars. MRIs offer another way to move capital into Native communities.

“This new direction allows us to be more nimble, more flexible, and more impactful in how we offer support to communities we care about,” says Jennifer Williams, Foundation board director and chair of the investment committee. “As we broaden how we think about our investments as a lever for mission, we’re going to learn alongside those we serve, test what’s possible, and refine our approach.”

Trusted partners help us identify and support investment managers from priority communities.

To source and vet new investment opportunities, we’ve partnered with NEPC, our longtime investment consulting firm. Krissy Pelletier, a partner who leads NEPC’s endowment and foundation practice, has worked with us for more than a decade and helped us evolve our investing approach.

“It’s exciting to work with a foundation that leads with its values at every level,” says Pelletier. “At Northwest Area Foundation, everyone in the room is clear-eyed about the mission. That allows us to focus on solutions and find the best opportunities across asset classes, stages, and strategies.”

She notes that expanding into public equity has been a game changer. “With public investments, you can deploy capital at scale and immediately. That’s especially valuable for foundations that want to act quickly.”

With NEPC’s guidance, we’re now partnering with a diverse mix of public investment managers, including two that exemplify both financial rigor and mission alignment: Denali and Xponance.

Denali Advisors is a Native-owned investment firm rooted in data-driven expertise.

Denali Advisors is one of the few Native American-owned investment firms in the US. Its founder and president, Robert Snigaroff, PhD, (Aleut/Unangan) is from Alaska’s Aleutian Islands and brings deep cultural roots and investment acumen to the firm.

Denali manages a small-cap value strategy (investing in smaller companies, with higher risk and more potential for upside) and uses ESG data tools to tailor portfolios for clients. “We can filter the stock universe to align with a client’s values and help them avoid sectors they prefer not to invest in,” says Snigaroff.

Being a Native-owned firm in this industry is rare, and building a boutique firm that competes against the larger investment firms is challenging, says Snigaroff, who is now based in Chicago. “Smaller firms have lost 80 percent of the market share, and diverse-owned firms face a difficult growth environment.”

According to Snigaroff, in 2024, the Foundation became Denali’s first foundation client. He notes, “The partnership has opened new doors for us, helping us leverage new client relationships that we didn’t have before.” This support, he says, has been significant as he works to grow his diverse-led firm.

Xponance is a Black- and woman-owned firm using innovative public equity strategies.

Xponance, based in Philadelphia, was founded by Tina Byles Williams in 1996 and now manages more than $23 billion. An employee-owned company, the firm has a focus on helping emerging diverse managers gain access to institutional investment.

In our portfolio, Xponance manages a custom public equity strategy based on the S&P 500, tilted toward companies with stronger ESG scores. Its partnership with the nonprofit shareholder advocacy group As You Sow provides hard-to-get corporate accountability and social responsibility data that can inform investment decisions.

“We’re focusing on companies doing better on diversity, workplace equity, and ESG risk,” says Sumali Sanyal, CFA, who leads the Foundation’s account at Xponance. “It’s about using every tool to advance the Foundation’s values.”

We’re exceeding our MRI goals—and learning as we go.

When we launched our 2030 investment strategy, we set an ambitious target of $54 million in MRIs. We’ve already more than doubled that, committing more than $100 million in MRIs, representing 20 percent of our endowment. This is a powerful sign of what’s possible when we move our money to mission.

Our learning is still evolving, yet what’s already clear is this: MRIs offer a way to shift capital to the people and places most often overlooked and deserving of investment. They reflect our deep trust in the communities we serve, and our commitment to justice, where opportunities are shared equitably across race, place, and income.

“We see MRIs as one more way to stand alongside the communities we serve,” says Walker. “It’s how we turn our values into action, moving capital where it can do the most good and help build a future where everyone has the opportunity to thrive.”