Investment Strategy: Our Capital Model
We seek to use our financial resources to further our mission in innovative ways, deploying capital through a combination of philanthropic grants, equity, debt and other financial instruments. We also align our endowment investments with our mission, and invest in media partnerships, global platforms, and marketing strategies that drive awareness of and investment in the work of our grantees.
Grants are an integral part of our investment strategy. Inspired by best-of-breed venture investors, we employ a flexible, phased approach to grant-making and collaborate with our social entrepreneurs on grant objectives, while allowing them to determine how best to allocate resources to achieve them. We have invested more than $150 million in the Skoll Awards for Social Entrepreneurship and in deeper investments in their innovations. All of these investments support social entrepreneurs whose work has the potential for large-scale impact in critical social change areas: deforestation, education and economic opportunity, effective development, healthcare access and treatment, smallholder productivity and food security, stabilization, sustainable markets, and water and sanitation.
Skoll social entrepreneurs are innovators who have developed, tested and proven their approach. Our goal is to partner with them to replicate or scale their impact and to help engage those whose resources, connections, and capabilities are crucial to advancing their innovations. The Skoll Awards are designed for leaders whose experiences in social change allow them to contribute to a peer network committed to continuous learning and shared expertise. We share their stories to demonstrate their impact and to make vivid the power of social entrepreneurs to transform our world.
The Skoll Awards provide multi-year, core support to help organizations expand their programs and capacity to deliver impact at broader regional, national or global levels. They are not intended for new or early-stage programs or initiatives. Applicants must have a track record of no fewer than three years with documented results. Awards are presented annually at a ceremony at the Skoll World Forum on Social Entrepreneurship at the University of Oxford in England.
Program-Related Investments (PRIs)
Program-Related Investments (PRIs) provide capital at below-market rates to further a charitable purpose. Using vehicles from commercial finance, such as loans, equity investments and guarantees, PRIs offer the opportunity to blend the mission focus of a grant with the discipline and leverage of a financial investment.
For Skoll Awardees with earned revenue and/or for-profit business models, we may augment grant funding with below-market interest rate loans or guarantees when there is an opportunity to significantly increase programmatic impact or scale. We also invest in financial intermediaries who accelerate access to capital and other resources to those in underserved markets.
Currently, our PRI portfolio contains a mixture of loans, equity investments, and credit accommodations:
$1 million equity investment in ShoreCap International, a fund investing in microfinance institutions and other banks targeting their lending at underserved individual entrepreneurs and small business owners in Africa and Asia. $2 million equity investment commitment to ShoreCap II Ltd., the successor fund to ShoreCap International with a highly similar investment focus.
We manage our endowment in alignment with our mission and standards for institutional responsibility. The investment goals for our endowment are:
- To generate income necessary to fund our grants, program investments and operations over the long term;
- To grow the real value of our financial assets over the long term; and,
- To seek investments in funds and companies whose practices and products further our mission and avoid those whose actions work counter to the mission.
Our investment manager is Capricorn Investment Group. We use a principled investing approach based on a belief that superior investment returns can be achieved by incorporating ethical, social and environment factors.
Customers, shareholders and constituents can and should hold institutions accountable for the results of their actions. As shareholders in publicly traded companies, we manage our shareholder proxy votes according to our Public Shareholder Engagement Guidelines. We also add our voice to those of other investors seeking to change a harmful status quo. For example, following the lead of Ceres, a Skoll Awardee for Social Entrepreneurship, we signed the Investor Network on Climate Risk (INCR) Action Plan.
Good social and environmental stewardship ultimately benefits financial performance. We believe that companies that do not acknowledge and manage their environmental, social and governance risks are at a significant long-term financial disadvantage. We avoid these risks in our own investments by employing company and issue-specific negative screens. Our purchases of public securities are informed by company assessments provided by RiskMetrics, the Conflict Risk Network,and other research sources.
Connecting with others
The principles and actions we are pursuing rely significantly on the leadership and support of others seeking responsibly to deploy capital for good. A partial list includes: