Founded in 1992 with the mission of helping people and communities to help themselves, the F.B. Heron Foundation came into being during one of the greatest economic booms in U.S. history. The strong financial markets of the 1990s not only spurred rapid growth of Heron's asset base but also served to reinforce its focus on asset building and community economic development, given that so many Americans did not benefit from the wealth generated in the heated economy.
Faced with the challenges of making effective grants and managing a growing endowment, Heron's board of directors understood all too well that the scope of the social problems it sought to address required more significant resources than its mandated 5% payout. At a regularly scheduled meeting in 1996, Heron's board reviewed a particular investment manager's performance for what seemed like hours, leaving little time for program matters. This imbalance caused the board to step back and evaluate the effectiveness of the foundation.
This case study explores the F.B. Heron Foundation's approach to mission-related investing.