Why Doesn’t the Gates Foundation Embrace Mission-Related Investing?

The Bill & Melinda Gates Foundation saw its assets tumble by 20 percent last year.

Nathaniel Whittemore, blogging at Change.org, says maybe it’s time for the grant maker to consider investing in ways that advance its mission of improving people’s well being worldwide.

The Gates Foundation hasn’t warmed to mission-related investing, instead choosing to invest its assets in companies that its advisers think can have the highest returns. Proponents of the Gates’s approach tend to think that mission-related investing isn’t all that influential — “that the resources are simply too disbursed and that corporations who meet the social impact cut are probably just gaming the system any way,” says Mr. Whittemore.

“But if the Gates Foundation takes those cynical views — particularly that the resources they have are too small to make a difference in the financial markets — then what the hell are they doing in this business anyway?” he says. “They’re bold enough to try to eradicate malaria but forget shareholder advocacy, that’s too hard?”

Mr. Whittemore says he’s a fan of the work being done by the Gates foundation, and hopes it can quickly get its endowment up to where it was before the market crash. But he asks of the foundation, “when you just lost 20 percent of your investments in a host of 20th-century institutions that are withering both because of the market and because of their own failure to adapt, what do you have to lose?”

(For more on foundations and mission-driven investing, see this Chronicle article).

What do you think? Is the economic crisis an opportunity for foundations to consider mission-related investing?

— Caroline Preston