Amy Eybsen Manager, Green Hasson Janks

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3 Amy Eybsen, CPA, has more than eight years of public accounting experience and is a manager within the Green Hasson Janks Assurance and Advisory Practice. Amy provides accounting, auditing and transaction services to a wide variety of companies and organizations that span multiple industries within the greater Los Angeles area, with a specialty focus on nonprofits and private foundations. Her expertise also includes transaction due diligence. Amy Eybsen Manager, Green Hasson Janks Anna joined Angeles Investment Advisors at its founding in 2001, and is a partner of the firm. Anna works with foundations, endowments and pension plans on formulating and implementing strategic asset allocation, investment portfolio structure, and policy development. Prior to joining Angeles, Anna worked with the principals of Angeles at Asset Strategy Consulting and its successor firm. Anna joined Asset Strategy Consulting in 1999, as a performance measurement analyst and in 2000, moved to the manager research team to engage in the analysis and due diligence process involved in hiring and terminating money managers. Anna McGibbons, CFA Managing Director and Partner, Angeles Investment Advisors

4 Today s Speakers Lisa Richter is a Managing Partner and co-founder of Avivar Capital. Previously, Lisa co-founded and led GPS Capital Partners, a national consultancy that assisted foundations and other institutions to design and execute impact investing strategies. Lisa co-leads Avivar s overall business activities, bringing over two decades of fund management and investing experience spanning asset classes, return expectations, geographies and issue areas, and frequently incorporating place-based or sector focus to increase equitable access to opportunity. Lisa Richter Managing Partner, Avivar Capital Lizbeth Nevarez, CPA, has 10 years of public accounting experience providing tax and consulting services and leads the Firm s Nonprofit Tax Practice. Lizbeth is a frequent speaker at the Firm s nonprofit workshops. She has completed the Riordan Leadership Institute s Board service program through the Los Angeles Junior Chamber of Commerce. The program's mission is to develop and cultivate business professionals for lifelong service in the nonprofit community. She has also taught courses on Form 900 basics and Private Foundations through CalCPA. Lizbeth Nevarez, CPA Senior Manager, Green Hasson Janks

5 We Will Cover Mission Investing what is it and how do we do it? Developing a Policy and Implementation PRI and MRI Tax Considerations

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7 Market Rate Investments, also known as Mission Related Investing (MRI) Below Market Rate Investments EXCLUSIONARY INTEGRATION INTENTION Negative Screens Positive Screens ESG Integration Shareholder Engagement Impact Investing Program Related Investments Excludes companies that do not align with investor s values. Tilts portfolio toward companies with high ESG measures. Integrates ESG metrics into an investment process qualitatively and quantitatively. Voting proxies and engaging with companies on various ESG issues to effect changes in behavior. Targets a measurable positive social and/or environmental impact. Most traction in private markets. Focus is on charitable intent. May count toward foundation s payout requirement in the year the disbursement is made. DIVERSITY, EQUITY, INCLUSION

8 1 Adapted from US SIF, 2 Source:

9 Need for impact capital far outstrips grant resources. Expand Resources & Impact Align Resources Global Capital Markets $212 Trillion US Budget $4.2 Trillion US Foundation Assets $865 Billion Annual US Foundation Giving $59 Billion Investors Investees Sustainability & Scale Influence Markets Capacity/ Leverage Managerial Discipline US Foundation Impact Investing $12.5 Billion

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12 Goals & Metrics Landscape Analysis Leverage including Donor & Partner Engagement Organizational Design Scope & Purpose Governance Risk & Return Objectives Risk Management Planning Policy Program Execution Program Integration Evaluation & Learning Communications Portfolio Management Process & Procedures Manager / Financial Intermediary Selection Staff / Consultant Roles Transaction Execution Monitoring & Reporting Avivar Capital, LLC

13 MRI Education & Learnings Governance Strategy Development Initial and ongoing education with Trustees and Staff Survey Trustees to establish initial goals and reach consensus Continual learnings and reflection to improve outcomes Establish oversight body, e.g., MRI Committee Determine roles and discretion level for staff, consultant, board/committee Determine accountability for various parties Benchmarks for success Establish MRI objectives Establish mission priorities (e.g., affordable housing, sustainability, diversity, etc.) Establish strategies for implementation (e.g., exclusionary, integration, intention) Establish approach (e.g., carve out, full portfolio, opportunistic)

14 Many investors that have not established a specific MRI policy still want to know what they own. Angeles created a framework for understanding managers ESG integration and diversity, equity and inclusion practices and communicating this information to clients.

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16 Meet all three requirements: Its primary purpose is to accomplish one or more charitable purposes No significant purpose of the investment involving the production of income or the appreciation of property No significant purpose of the investment should be used in the carrying on of propaganda or otherwise attempting to influence legislation or intervening in any political campaign on behalf of any candidate for public office

17 Loan Deposit Loan Guarantee Private Equity Investment

18 Exemption from being considered jeopardizing investment Treated as direct qualifying distribution Allows funds to be recycled and used again Excluded from Minimum Investment Return Calculation i.e., PRI not subject to the 5% yearly distribution requirement

19 MRIs are treated as normal investments of the Foundation Subject to the minimum distribution requirement Subject to jeopardizing investment excise tax

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21 Anna McGibbons, Managing Director, Partner Lisa Richter, Managing Partner Amy Eybsen, Manager Lizbeth Nevarez, Senior Manager

22 Slide 9. Approaches to SRI-ESG adapted from US SIF. Slide 9. Leonardo DiCaprio Foundation, Slide 10. Global Capital Markets, McKinsey & Company. Slide 10. US Budget, as of Slide 10. Association of Fundraising Professionals. Slide 10. Foundation Impact Investing, Global Impact Investing Network, Slide 11. UN Sustainable Development Goals.

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