The Catholic Community Foundation of Minnesota (CCF) was founded in 1992 to be a separate, perpetual, Catholic steward of charitable resources. Our mission is to support financially the spiritual, educational, and social needs of our Catholic community. Since our founding, we’ve grown to be the largest Catholic community foundation in the nation, managing $408 million in assets (as of December 31, 2019). And we’re the sixth-largest public grantmaker in the state of Minnesota, granting nearly $17 million annually to the needs of our community.
None of this growth would have been possible without the multiple layers of oversight that help manage these assets. CCF’s board of directors, Investment Committee, staff, investment managers, and financial custodians all bring key expertise to help us achieve our mission.
And CCF continues to grow. We’ve set a big, bold vision for ourselves, aiming to grant $50 million annually to our Catholic community. To do that, we rely on partnerships and prudent asset management practices. As a Catholic community foundation, that means ensuring our investments do good while they do well.
Over our 27 years of operation, CCF has progressively put into practice the Socially Responsible Investment Guidelines recommended by the United States Conference of Catholic Bishops (USCCB). As of 2019, all three USCCB strategies for principled stewardship — Do No Harm, Active Corporate Participation, and Promote the Common Good — are fully reflected in our faith-consistent investment practices. We’ve implemented these practices by proposing incremental changes and then building on early successes.
Do No Harm: An Integral Practice
Even from our early days, CCF has screened investments. The practice has been instrumental in defining and differentiating our brand within our local philanthropic community. Our institutional partners and donors could invest their charitable assets anywhere. But a key reason they choose to invest with CCF is because they can rest assured their money won’t support things antithetical to Catholic values — such as abortifacients, weapons production, predatory lending, or gambling.
Ever prudent, CCF’s Investment Committee began screening with caution and curiosity. As a perpetual steward of community assets, the committee wanted to be sure that screening investments wouldn’t mean sacrificing returns. Over the last 15 years, our Russell 1000 screened index portfolio has outperformed the Russell 1000 benchmark by 29 basis points net fees. This is the best indicator that performance is not sacrificed through screens.
CCF’s scale and operational structure make it possible for us to screen investments efficiently. And we’re constantly reviewing and refining the strategy. We’ve developed a proprietary list of categories and screens and use the list to build our portfolio. This way, we can see exactly how much we own of which companies. Then, when a company changes its practices, we can invest or divest accordingly.
Active Corporate Participation: Engaging Partners
As the funds under CCF management have grown, so has our ability to influence corporate responsibility — and our responsibility to use our influence as a shareholder.
We engage with an investing firm for proxy voting and corporate communication. All the firm’s clients are Catholic, so we know when they vote proxies, they are doing so in alignment with our faith — not just in alignment with the priorities of their largest client. Rather, their goal is to engage with company management to effect positive changes in corporate culture.
CCF serves on an advisory board with this partner to provide guidance and remain informed on current trends in the corporate world.
Promote the Common Good: Incremental Steps
Since 2018, CCF has been full-heartedly fulfilling Pope Francis’s vision of “putting the economy at the service of people” by impact investing.
It started small and local.
A modest investment of $1 million in a local affordable housing nonprofit enabled the nonprofit to receive $20 million in financing. In a few years, we’ll redeem the $1 million and receive a modest return — equivalent to the yield we see with cash. In the meantime, much-needed affordable housing units are being built or maintained in our community.
Once we started impacting investing, we wanted to do more. But CCF’s proposal for a second impact investment met a bit of resistance. This investment was a $2.5 million commitment to Ascension Investment Management’s Impact II fund. It would be benchmarked against private equity, rather than the money market, and so, it required a higher standard for returns.
CCF’s director of investments worked with our Investment Committee chair and consultant to creatively plan the investment. Our long-term pool had a five percent allocation for “special situations.” This allocation category was reserved for unusual securities like global distressed debt or an out-of-favor sector that might deserve a shorter-term bet. It was a fitting allocation category, too, for impact investing.
Following these first two efforts, CCF was invited to attend the Third Vatican Conference on Impact Investing. For our board and Investment Committee, this recognition clarified and illuminated the moral value of impact investing. It’s not just about financial returns. It’s about aligning our money with mission in a measurable way. And these actions further strengthen our reputation as a Catholic foundation committed to Catholic investing.
Looking to the Future
Since then, we’ve committed an additional $5.5 million to impact investments, bringing our total impact investments to $9 million. We’re eager to continue building on the progress we’ve made to date and know now, from experience, that incremental change can result in an evolution of practices.
