ICYMI: Why Meyer Memorial Trust's 'breakthrough' investing year mattersdarion Thu, 11/19/2020 - 02:01

Cambridge Associates, a national firm that tracks the performance of endowments and foundations, recently reported that last year Meyer Memorial Trust’s Investments portfolio generated a return rate that exceeded 25 percent — well ahead of the national average of 17.1 percent and the 432 organizations tracked by the firm.

Portland Business Journal recently interviewed Meyer’s Chief Investment Officer Rukaiyah Adams about the breakthrough year of investing:

As Meyer Memorial Trust's portfolio matures, Adams' investment philosophy to drive civic and social change is coming into view. Broadly, Adams looks to invest in ways that drive more equitable economic growth, such as water desalination technology and broadband access.

‘Imagine if we lived in a world where there was broadband access available to everyone in an affordable way and ed-tech tools that allowed millions of children today that are not educated to reach a level of literacy and education,’ said Adams. ‘That would ignite a level of economic growth, innovation, and vitality that the world has never seen.’

You can read the full Portland Business Journal article for free here: https://bizj.us/1q6g6x

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Expanding our priorities: A strategic focus on Mission-Related Investing

Doug Stamm: Meyer’s mission is to contribute to a flourishing and equitable Oregon. That means our mission is place-based. We try to maximize impact by aligning all parts of our business in this effort. We stay focused on our mission in Oregon when awarding grants, in the day-to-day operation of our business and, to some degree, when managing our investment portfolio.

Rukaiyah Adams: Yup. We said it, “to some degree.” That’s an awkward way to put it, but that’s the way it is.

Historically, we have focused most of our resources on successfully investing Meyer’s assets in global markets. We did that because our most important fiduciary responsibility as foundation investors is to optimize risk-adjusted returns so that our program teams can continue to make grants long into the future. As a result, we have a top-performing investment portfolio. Thankfully, it is exactly that long-term success that affords us the chance to set new, more visionary objectives for mission alignment in our investment work. Although we have made opportunistic mission-related investments for about a decade, the truth is that alignment with our place-based mission has not always squared with optimizing returns. Not to mention historically we haven’t devoted enough resources to refining our alignment. Until now.

Doug: Three years ago when Rukaiyah took the helm of Meyer’s investment team, we knew that regional investing would require better thinking, more resources and greater clarity. We asked, what does it look like to find investments that lead to a more flourishing and equitable Oregon? By which methods do we share our quantitative performance information about regional investing with other technical investors? How can we better use our position as long-term, regional capital to convene, explore, catalyze and lead?

As two of Meyer’s senior leaders, it is our work to provide strategic leadership. Together with the Meyer Trustees, we agree: Mission-related investing is a strategic priority. As Mitch Hornecker said, "To create a vibrant economy with opportunity for all Oregonians — and a safety net for those in need — we must be thoughtful and strategic and carefully scrutinize our public and private investment decisions.” Decades ago, it may have been a dream to find profitable and scalable investments that allow us to incorporate mission into our investment portfolio. The tide, however, is turning. Meyer has long been part of this shift.

Rukaiyah: Scalable transformation for regional investing will require Meyer to be very clear that mission-related investing is first and foremost investing, not grantmaking; a sustained focus with buy-in at all levels of the Meyer organization; and a long-term commitment of capital. For many years, Sayer Jones, in addition to his responsibilities as Meyer’s finance director, was leading mission-related investments. In our effort to shift our strategy toward greater definition and success, Sayer will now be able to exclusively focus his time, expertise and passion as Meyer’s first director of mission related investing.

Last year alone, Sayer’s deep connections throughout Oregon made it possible for Meyer to convene Oregon’s leading innovators in economic development, which has sparked ideas and resulted in a first-ever map of the capital ecosystem to help legislators and business leaders understand the challenges facing entrepreneurs.

Recently, Sayer spearheaded Meyer’s $2 million investment in Elevate Capital. Founded by Portland-based entrepreneur and investor Nitin Rai, Elevate invests in startups led by minorities.

Make no mistake, we will continue to invest our portfolio to optimize risk-adjusted returns around the world. That will never change. However, we expect, with the addition of this strategic focus on regional investing, that there will be more options for us to do well and do good in our own backyard, here in the Pacific Northwest.

Meyer’s investment team and trustees are working to clarify mission alignment and developing a 10-year plan for mission-related investing so that we can get to work!

Stay tuned for updates from Sayer.

—Rukaiyah & Doug

Learn how Meyer is developing a 10-year plan for Mission-Related investing
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ICYMI: Investing in Place-Based Impact

It's been two years since Meyer joined a handful of other foundations to pool funding in a collaborative effort, called Canopy, to drive more community-driven impact investments throughout the Pacific Northwest region. 

One of the fund managers in the Canopy ecosystem is Elevate Capital, founded by Portland-based entrepreneur and investor Nitin Rai:

Nitin became a mentor as part of TiE—a non-profit, global community of entrepreneurs, focusing on five pillars: mentoring, networking, education, incubating, and funding. Nitin later became President of the organization, and in this role, launched TiE Oregon Angels to support high-quality emerging companies with early stage investment, mentorship, and support. Since inception, this group has invested over $5 million in 28 startups across Oregon.

When word spread about the success of these startup investments, Nitin eventually connected with Sayer Jones, Director of Mission Related Investing at Meyer Memorial Trust. Meyer is very committed to aligning the foundation’s investments with its philanthropic mission. In his Meyer role, Sayer has consequently been at the forefront of expanding the opportunities for mission-related investing in the Pacific Northwest region. When Sayer met with Nitin, he saw a great opportunity to fill one of the largest gaps in the regional investing landscape—entrepreneurs who need small amounts of capital to get off the ground as well as businesses led by people of color, women or veterans.

Read the case study, with an introduction from Richard Woo, chief executive officer of The Russell Family Foundation and chair of Canopy, right here.

Elevate Capital Team (from left to right): Nitin Rai, Managing Director, Robin Jones, Venture Advisor, Eric Boothe, Venture Associate
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A roadmap for enterprise

Ever wonder why Oregon has so many accelerators, incubators, tech challenges and venture conferences?  Or, do you just wonder what all those things are? Yeah, so did we, since we invest in many of these things. 

So, to try and figure out what seemed to be unhindered, organic growth of seemingly unconnected business activities, Meyer brought together a diverse set of dedicated economic development professionals from around Oregon to attempt to put our ideas down on paper. The big idea: to actually visualize it.

Working with a communications consultant, we worked to create a simple yet dynamic map of how capital is allocated in the state. The final report is our attempt to illustrate how this work is connected, and to better understand how access to capital plays out in our region. Now investors can understand how each investment fits together into the bigger picture of what we are doing to invest in our people and our ideas. The long-term goal of this work is for all capital providers to be more informed when making investments in Oregon.

Check out the roadmap or explore the chart. And, please, let us know what you think in the comment section below.

— Sayer

A graphic tool to help capital providers to be more informed when making investments in Oregon
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How we invest

There’s not a lot of certainty in investing, so we keep our mission and values front of mind to help us make the tough calls. After all, it is our investments that drive our impact, from the investments we make in capital markets to the investments we make in the people running our business to the investments we make in our community through grant-making. The links are clear.

Given this philosophy, we promote investment principles that have proven successful, even though they challenge convention. And we continuously revisit and refine our approach. A few key assumptions guide us:

  • Our long-term investment horizon is an advantage and a responsibility, one that we take seriously.

  • The full realization of our mission takes a broad effort that includes business and investment partners.

  • Some of our decisions directly reflect our mission, while others may be more focused on financial performance (see note below), but in all cases, we use our best judgment and aim for transparency to acknowledge the underlying tensions between our financial returns and our mission, values and beliefs.

  • Risk and return cannot be captured solely through traditional quantitative measures.

A more comprehensive version of our investment principles can be found here.

Governance

Our investment process is overseen by Meyer’s six-member board of trustees. Together with staff and consultants, they set asset allocation and risk levels annually, informed by the macroeconomic environment, regional opportunities and grant-making needs. In Meyer’s private asset portfolio, we provide feedback to managers when we have concerns about alignment with our values. In our public asset portfolio, we are committed to being transparent about what we invest in; we vote proxies in accordance with socially responsible principles.

Strong oversight enables sound investment

Every other year, we invite our investment managers to a roundtable meeting to share ideas and visions for the future. Much like our investment philosophy, our investment approach embraces nontraditional skills and diverse points of view.

We post each year's tax filing, which can be found here.

View Meyer's total assets here.

A note about Meyer’s public asset investing:

There is a tension in managing a large, diversified portfolio that serves to fund Meyer's philanthropic work. Our portfolio and our philanthropic work are, effectively, two hands working at somewhat different purposes.

That is especially clear where our financial investments are made in industries or practices that our grantmaking aims to remedy. For instance, we invest in funds that profit from distressed lending; yet, on the program side, we directly support affordable housing organizations working to make a more equitable world for people who are disproportionately vulnerable to predatory lending.

We recognize the dissonance between our fiduciary responsibility to grow our corpus through profitable financial investments and the vital program work we support — and the questions that dissonance raises: How can we help bring down structural and institutional barriers and promote equity, even as we profit from those barriers? How can we be part of the cause and solution at the same time? Where we learn of direct conflict between our investments and our program work, we call out these points of tension with our managers to encourage them to better align their efforts and our investments with our values.

We are committed to voicing this dissonance to our managers to better align with our mission.

These aren't abstract, rhetorical questions for a foundation that takes seriously the charge to be a regional and national leader in the sector. We don't have satisfactory answers, and we may never have them. But we are learning as we go. Our investment philosophy continues to evolve.

2015 Assets
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ICYMI: A Tremendous Force of Will

Rukaiyah Adams spoke with Isabel Wilkerson, author of the best-selling book The Warmth of Other Suns, which narrates stories from the nearly six million African-Americans who migrated from the South in the 20th century, in search of a better life.

Rukaiyah, a fourth-generation Oregonian whose family was part of the decades-long exodus known as the Great Migration, led their discussion on the Great Migration and its role in the civil rights movement.

Oregon Humanities excerpted from their conversation and later hosted the two women before a sold-out crowd in Portland.

Here's a peek at what they discussed:

Adams: The other thing I’m wrestling with now is being the descendent of those people who were so brave in facing such uncertainty and uprooting. I’m in the generation that my great-grandmother envisioned a life for. I’ve had more equal access to education, I have clean air, I have meaningful work. So in the long arc of what is seeking the freedom of our people, I keep returning to her experience and her notes in her Bible, thinking this protest didn’t end with her feet and her arrival in Oregon. What is the role that I play in this conversation? I watch what’s happening in Flint and Ferguson and Baltimore. And there’s protest in the streets, and at this point I think that the next wave of power is in owning and having the authority to set the agenda and to direct resources instead of petitioning morals or the law. That’s something I’m wrestling with, that the protest didn’t end with their arrival. That each one of us, in living out a fully, joyfully, powerfully black life, is the continuation of the statement that she was making. That I actually need to live the life that she imagined would be so great, and it turns out it’s better than she imagined. My great joy that I’m the recipient of that amazing risk that she took — it stuns me.

Wilkerson: We all owe a great debt to those brave people who took that leap of faith into the unknown. Not only you as a direct beneficiary, but the country owes a debt to them because they suffered so much under the brutal regime of Jim Crow. They — without the help of outsiders, without depending upon anyone else—took the step on their own to exercise their own agency. They went into often unexpectedly hostile environments. They were often misunderstood, they were often dismissed and faced rejection in these places that they had so much hope in, and still they persevered and hoped that life might be better — if not for themselves, then for their children and grandchildren and further down the line. Despite the odds, they were able to make it a better place for their children and grandchildren to the degree that they could, only to see the country flip back in the current era that we’re in. So it’s a very complex interweaving of forces that leads us to where we happen to be right now.

Read their conversation here

Left: Rukaiyah Adams, photo by Leah Nash photography. Right: Isabel Wilkerson, photo by Joe Henson

Left: Rukaiyah Adams, photo by Leah Nash photography. Right: Isabel Wilkerson, photo by Joe Henson

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Unlocking an Ecosystem of Pacific Northwest Investing

In a rainforest, shafts of sunlight pierce through the topmost layer, illuminating the darkness below and sparking new growth. Seattle-based Canopy borrows its name from this notion of spotlighting new growth, focusing on regional investment.

Canopy’s goals are simple: to strengthen communities by identifying opportunities for diverse stakeholders — nonprofit institutions, for-profit organizations and individuals — to put capital to work locally in innovative ways that benefit investors and the places we call home.

Canopy addresses:

  • A lack of information among decision makers (by making research and information available in a centralized hub)
  • A lack of sophistication among investors and investees (by addressing both the supply and demand side)
  • A lack of incentive for investment consultants to participate (by creating a new model with different investment criteria and new frameworks to assess performance)

Canopy’s innovative investment research, training and management nurtures local and regional funders to join together and plant their capital right here in the Pacific Northwest. Doing so plants communities in a more fertile, regional economic ecosystem.

“Canopy democratizes the investment field by broadening participation and welcoming collaboration, so capital can flow to where it’s needed most in our communities,” says Lauren Sato, chief operating officer of Canopy.

Founded in 2103 by the Russell Family Foundation of Gig Harbor, Wash., The Laird Norton Family Foundation of Seattle, and Meyer Memorial Trust, Canopy aims serve a diverse mix of private foundations, government entities, corporations, individuals and other stakeholders. Along with seeding the enterprise, Canopy’s founders share the expense of sophisticated institutional research, provided by a partnership of Canopy, the Threshold Group and the University of Oregon. Without this otherwise cost-prohibitive research — accessible to all members — smaller foundations and other investor likely would opt for traditional, global investments in diversified markets. But with Canopy, they have the unique opportunity to invest their assets right in their home communities. And the founders oversee the company and prioritize its operations to ferret out funding organizations and regional investment opportunities, such as local businesses with positive social/environmental impact and significant investor return.

As a capacity-building organization, Canopy also trains investment-fund managers in how to find, manage and best utilize greater amounts of capital, ensuring long-term regional investments that withstand the rigor of institutional due diligence and attract new sources of capital. Together, funders decide just where to invest the wealth. When Canopy’s members pool their knowledge and financial resources, they leverage their efforts to financially invest even more in their communities, more than they ever could alone.

It’s a lot like that rainforest.

It could never exist without a myriad of trees anymore than Canopy’s members could generate regional prosperity without collaborating. Together, they’re transforming how funding institutions and individuals put their capital to work. Just as the forest makes room for new growth, Canopy is opening the way for a new generation of investors — ones whose numbers are only increasing — to help their communities thrive.

Canopy Investing
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