The current state of the capital markets and the U.S. financial system have left many investors paralyzed in fear, but this community, like us at Renewal, is choosing hope over fear.  Hope that these times will inspire us to invest smarter and with a broader purpose than just having money make more money.

We have been speaking with many of our friends in the foundation community, as we are out seeking investors for our social venture fund Renewal2.  In this process we are seeing two distinctly different camps - one group feels that now is not the time to make any changes (the "wait and see" camp) and the another sees that scarcity requires them to be creative in finding new ways to meet the needs of their community (the camp of hope).  I recently read an article by Doug Bauer and Steven Godeke of Rockefeller Philanthropy Advisors on this subject called "Mission-Related Investing in an Age of Scarcity."  The key message is that current environment has created a perfect storm for foundations; just at the time most foundations' grantees are in greater need the foundation is required to reduce their disbursements due to their significantly reduced capital pool.  One potential response to this situation is to employ more capital towards "mission-related investing" (MRI), which is any investment activity which seeks to generate a positive social or environmental impact in addition to providing a financial return.  An MRI program allows foundations' to achieve some of their goals through the investment strategy rather than through grants.  For example, if an organization was concerned about climate change and they invested in a social venture fund like ours, they would be supporting companies in the organic food, green consumer products and green building sectors while at the same time earning a market rate return.

In these challenging times we all need to focus on generating positive social change more efficiently and effectively.