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Trillium News

November 1, 2013

blue moon fund: Integrating Mission into Investments

By: Diane Schmidt, Chief Financial Officer & Jason Green, Chief Investment OfficerBlue Moon logo

 

blue moon fund, Inc. is a private foundation working to build human and natural resilience to a changing and warming world. We work to protect landscapes and livelihoods threatened by climate change, focusing on conservation and preservation of biodiversity and critical habitat regions in Asia, North America and the Tropical Americas.

Eleven years ago, Diane Edgerton Miller launched the fund with these themes in mind:

Holistic. Operational. Leverage.

One challenge to her vision for blue moon was the traditional foundation model of absolute separation of program strategy and grant-making from its investment management. We believe foundations have an obligation to employ all of their financial resources to drive positive change.

Our fund researches, evaluates and creates opportunities to deploy expertise, contacts and financial capital to maximum philanthropic effect. We have always had deep scientific and policy experience in our program staff. After experimenting with several approaches, today blue moon operates an integrated foundation, utilizing both our human and financial assets to maximize impact.

In 2012, after a decade of fully- outsourced financial consulting, we hired a chief investment officer, bringing a significant portion of the investment management function in house. Through a combination of grant-making, program-related investments and investing our endowment, blue moon’s program staff and in-house investment team work together to deploy capital in the highest and best use situations to achieve our philanthropic mission.

Traditionally, foundations have a clear distinction and division between their investment portfolios and their grant portfolio. blue moon believes that these divisions should be removed and that mission should drive both portfolios.

Today, this allows program strategy to directly inform and help guide management of our portfolio and has augmented our ability to structure and execute program-related investments. In addition, blue moon’s investment committee participates directly in our program strategy and grant-making meetings and updates regularly the entire staff on the progress of our investment portfolio.

We invest our portfolio with an endowment-style approach, diversified across asset classes. We are opportunistic and invest both directly and through outside managers. In evaluating new investments, we work together with program staff to ensure alignment with our mission and the greatest potential for impact with our capital. Whether funding an early-stage company, providing project finance or utilizing ESG factors to select high-performing, sustainable public companies with which we can engage positively as active shareholders, our endowment is a powerful asset in furthering our mission.

With a sufficient quantity of viable options with which to construct an institutional quality portfolio, we are on the cusp of having fully invested our endowment, across major asset classes and in alignment with our mission.

Once completed, the fund will begin reporting publicly our holdings and our results, benchmarked against the unconstrained portfolios of our peers. We hope our mission-driven investment philosophy and total portfolio approach will encourage foundations and other asset owners to invest in accordance with their principles.

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