Aligning Resources for Good: Incorporating SRI into a Philanthropic Framework

By Melissa Berman, CEO, Rockefeller Philanthropy Advisors

Philanthropy is rapidly transforming to incorporate advocacy and investing, presenting exciting opportunities to create change. Among a field of new players, vehicles and approaches, one strategy gaining significant traction is Sustainable Responsible Impact (SRI) investing. Yet, as many philanthropies broaden their activities from traditional grantmaking to incorporate SRI investing, they need to change how their organizations assess and allocate financial as well as non-financial resources.

Social investors are seeking new models not only for funding strategies, but also for impact measures, organizational design and management systems in order to guide these changes. Leaders are asking how philanthropies achieve impact as institutions, not just as sources of funding. In response to this surge of interest, Rockefeller Philanthropy Advisors launched a multi-year program of collaborative research called the “Theory of the Foundation”, co-developed and supported by more than 50 funders to date. The initiative was inspired by iconic management expert Peter Drucker’s seminal article “The Theory of Business,”[1] which called on business leaders to assess their fundamental assumptions in response to changing conditions. Drucker’s challenge is highly pertinent to philanthropy, and is particularly urgent in this era of innovation and reevaluation.

Based on the Theory of the Foundation initiative’s extensive research in the U.S., Europe, Asia, and Latin America, we developed the Philanthropy Framework, a tool to give emerging or established philanthropies, including those looking to grow their SRI practices, a structure to align resources for maximum impact. The Framework is comprised of three core elements:

Charter – the organization’s scope, form of governance, and decision-making protocol;

Social Compact – its implicit or explicit agreement with society about the value it will create; and

Operating Model – the approach to the resources, structures and systems needed to implement strategy.

Foundations in the U.S. and Europe have begun using this framework successfully as a practical, concrete tool for analysis, planning and decision-making.

As interest in SRI investing continues to grow in the philanthropic sector, we’ve given much thought to how a foundation can apply the Framework to strategies that use all of its capital in order to create positive impact. Each of the three Framework elements can help define an SRI investing strategy.

An organization’s charter tells its origin story and defines its intended scope, form of governance, and procedural guidelines. The charter encompasses an organization’s history, governance, decision-making processes, intrinsic risk tolerance, culture and values. Organizations considering incorporating an SRI investing strategy should consider these factors: Are there constraints within your organization — whether regulatory or cultural — that might be barriers to SRI investing? Or, does your history and values encourage the use of new approaches in order to achieve mission? Reflecting on your organization’s charter will help you decide if SRI investing is right for your organization and how to incorporate it thoughtfully and effectively.

A social compact is an organization’s agreement with key stakeholders about the specific value it will create in society. It covers accountability, legitimacy, transparency, direction of influence on society, independence/interdependence and approach to risk. Some philanthropies we’ve interviewed feel that their role in society obligates them to put all of their capital towards creating good, rather than simply parking it somewhere dormant. Others see it as their duty to provide risk capital or to make “big bets” on innovative approaches to amplifying impact. Conversely, an organization may feel duty-bound to safeguard its capital to ensure its ability to support mission-driven programs in perpetuity. When an organization shifts its investment approach, it may need to reassess and adjust its social compact.

The third component of the Philanthropy Framework is the operating model: the combination of resources, structures and systems that enable a philanthropy to deliver on its mission, strategy, and goals. An organization’s chosen operating model plays a significant role in a decision to implement an SRI investing strategy. Do you have the necessary staff expertise and operational systems? Some organizations choose to build deep internal expertise in-house, while others prefer to augment their capabilities with outsourced philanthropic or investment advisors. Do your finance and program departments operate in silos? If so, merging traditionally separate teams can be challenging. But it also presents an exciting opportunity to break down those silos and to think about your organization’s ability to maximize its impact as an institution.

An example of an organization that has thoughtfully incorporated SRI investing is the Nathan Cummings Foundation, which announced in 2018 that it would move its entire endowment, nearly half a billion dollars, into investments aiming to further its mission. The decision was made after a reflection of the causes the foundation cared deeply about (combating climate change and social inequality) and the tools the foundation had at its disposal to move the needle on those issues. Crucially, there was alignment and enthusiasm among the foundation’s board, particularly its fourth-generation family members, towards the strategic shift. A sense of urgency also enabled the foundation to take risks and use market-based solutions in addition to philanthropy — both to tackle these issues and to demonstrate to other philanthropies that such a pledge was possible. The Nathan Cummings Foundation has been testing its strategy and growing its expertise for several years, while continuing to build the necessary internal capacity. These charter, social compact and operating model considerations allowed for a successful strategic shift towards SRI investing.

Many of the organizations we’re working with — whether as part of the Theory of the Foundation initiative or through our advisory work — are either already engaging in SRI investing or actively thinking about whether they should develop a strategy. For both new and experienced impact investors, it’s important to think about how SRI investing fits in with their organization’s charter, social compact and operating model. A thoughtful assessment and reflection of the financial and non-financial assets at your disposal will allow your organization to align all of its resources towards creating positive change.


Article by Melissa Berman, the founding President and CEO of Rockefeller Philanthropy Advisors, Inc., an innovative nonprofit philanthropy service launched by the Rockefeller family in 2002. Rockefeller Philanthropy Advisors’ mission is to help donors create thoughtful, effective philanthropy throughout the world. Rockefeller Philanthropy Advisors develops strategic plans, conducts research, manages foundations and trusts, structures major gifts, coordinates donor collaboratives, and provides regranting and fiscal sponsorship services.

Rockefeller Philanthropy Advisors also publishes, convenes and speaks about innovations in thoughtful, effective philanthropy. Rockefeller Philanthropy Advisors annually manages or facilitates over $250 million in giving to more than 25 countries. It has offices in New York, San Francisco, Chicago and London. Melissa has led Rockefeller Philanthropy Advisors since its inception, building it into one of the world’s leading philanthropic advisory, grant making, research and project management services. Under her leadership, RPA developed and published the “Philanthropy Roadmap” series of donor guides with support from the Gates Foundation. She developed and leads Rockefeller Philanthropy Advisors’ research initiative, “The Theory of the Foundation,” and is the author of multiple reports in that initiative. A frequent speaker, Melissa has been a guest lecturer at universities across the U.S., Europe and Asia including Harvard, Yale, Stanford, Duke, IMD (Lausanne), Oxford, Sun-Yat Sen, and Beijing Normal universities.

As a widely-recognized expert in philanthropy, Melissa has been profiled in The New York Times and the Stanford Social Innovation Review. Recent articles she has authored appeared in the Foundation Review and in the International Family Offices Journal. Her ideas and views are featured in The Economist, Wall Street Journal, New York Times, Financial Times, and The Chronicle of Philanthropy. She has been interviewed on the Today Show, NBC Nightly News, NPR, BBC Radio, CNBC-TV, and Bloomberg TV. An adjunct Professor at Columbia University’s Business School, Melissa is also a director/trustee of Rockefeller Philanthropy Advisors, the Adrian Brinkerhoff Foundation and the Foundation Center. She serves on the Advisory Boards of the Marshall Center for Philanthropy and Social Entrepreneurship at the London School of Economics and the Tamer Center for Social Enterprise at Columbia University. Melissa holds a B.A. from Harvard University and a Ph.D. from Stanford University. She’s proud to have majored in Folklore and Mythology.

Article Note

[1] Drucker, Peter F. “The Theory of the Business.” Harvard Business Review, 17 Oct. 2016,

Featured Articles, Impact Investing, Sustainable Business


  • Excellent article for incorporating SRI initiatives into philanthropic organizational investing to have more impact on the world around us. Thanks for sharing.
    Ken Jantz / JantzManagement

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