• Wealth Management

A New Roadmap for Mission Alignment

Non-profits, foundations and endowments need to ensure that their sources of capital are in sync with their stated goals.

We each face a great deal of choice in determining where to donate our time and money—our alma mater, children’s school, favorite local cause, or a global foundation. As donors deciding where to give, we may increasingly be asking nonprofit organizations new kinds of questions about the difference they are making in the world.

Traditionally, a nonprofit or foundation’s success was measured by the outcomes created from grant-making activities—the money given away to support the mission statement with low or no expectation of financial return. Recently, however, donors want to see that organizations are mobilizing all available sources of capital to allocate toward the mission, including financial or invested capital, and they want demonstrably positive outcomes from those capital allocations, without compromising the organization’s financial future.

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Now organizations have a roadmap to help accomplish this. Morgan Stanley’s Investing with Impact and Philanthropy Management businesses recently launched Mission Align 360°, an eight-step process to help nonprofits, endowments and foundations align their mission across all sources of capital. While intended for institutions, contributors can also use this roadmap to better engage with organizations and see how their donations are making an impact. Below are eight steps to help you figure out whether an organization’s capital is aligned with its mission—and help it adjust to generate even greater positive impact and mission alignment:

1.   Review the mission statement. Does it successfully define the organization’s purpose and values? Does it provide a clear vision of what the organization is working to achieve?

2.   Examine its operating efficiency. This includes considering  both operations and staffing. Are the right people in key positions?

3.   Review the Investment Policy Statement. Make sure the organization has a statement and check whether it integrates the mission statement.

4.   Evaluate existing assets. This includes pools of capital (such as the endowment or retirement fund) as well as human capital, or staffing. Are the program side and the investment side aligned on goals?

5.   Consider new possibilities for using different assets. Can certain pools of capital be better used to achieve the mission? What about potentially untapped resources?

6.   Ask whether assets that aren’t mission-aligned should be transitioned. This could include reallocating portfolios, reevaluating certain grants or restructuring staff.

7.   Monitor changes to make sure they are working. Is the organization adhering to plans for a more aligned mission with more potential for impact?

8.   Share findings with key stakeholders. Is the organization providing up-to-date and transparent information about its positive impact and mission alignment activities across all pools of capital?  Does it publish its Investing Policy Statement on its website?

Every organization is different. Its history, resources and policies around privacy will influence which steps in the roadmap are most relevant. If challenges emerge in implementing this approach, working through them may lead to new opportunities for the organization.

A Closer Look at Capital

The Mission Align 360⁰ process looks at an organization’s capital in three segments—financial (the endowment, cash on hand, operating budget, employee retirement funds), philanthropic (program-related investments, grant-making) and human capital (including employees, board members and peer institutions). Morgan Stanley Financial Advisors, working with Investing with Impact and Philanthropy Management businesses, look to see where capital is located when it is not yet deployed programmatically or being used to support the operations of the organization. They also periodically review the board of directors, CEO and staff and look at the organization’s approach to grant-making, confirming that existing commitments match current guidelines.

Organizations of all types have the capacity, and increasingly the desire, to do more. Few have been leveraging the full spectrum of their human, financial and philanthropic capital to meet their long-term financial objectives and create mission alignment. This kind of holistic process isn’t just a good idea, it is expected.

For more information on Morgan Stanley Wealth Management’s Mission Align 360°  Tool Kit talk with your Morgan Stanley Financial Advisor, or use the locator below to find a specialist in your area.

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