In the first two pieces in this series, we introduced the tidal foundation and explored when mission may require higher payout. But how much a foundation spends is only one part of stewardship — the other is how the endowment itself is invested.
But payout and investment questions are often treated separately. Grantmaking is where foundations most visibly express mission, while the endowment is managed primarily as a financial resource. Yet both are part of what a foundation stewards in service of its charitable purpose. A tidal foundation therefore asks two connected questions: How much should flow out as grants, and how should the capital that remains be invested to advance mission?
As we explored in the previous piece, the traditional 5% payout should not be treated as the automatic answer to the first question. Mission, opportunity, and financial capacity may point toward deploying more. The second question deserves the same scrutiny. What is the remaining capital being used for and how could it best advance an organization’s mission?
Mission-aligned investing is not new, and many foundations have worked to bring endowment strategy into closer alignment with mission. A tidal foundation builds on that thinking by connecting investment strategy more explicitly to the foundation’s overall stewardship. Just as 5% can become the default for spending, maximizing financial return can become the default objective for the endowment. Tidal stewardship asks both how spending and investment choices can best serve mission.
Where the Current Meets the Shore
Private foundations receive significant tax advantages and exist to serve charitable purposes. In that sense, “private” describes who governs them more than whom their assets are meant to serve. For us, tidal stewardship is also a question of public purpose. How can foundations use grants, investments, and influence to advance the public good? That does not mean replacing government, but complementing public resources and supporting the power of communities to shape how those resources are used.
Marguerite Casey Foundation (MCF) puts this principle into practice through its Public Dollars for Public Good strategy, which supports community organizing and efforts to unlock public funding. New York Foundation’s (NYF) Public Purpose Framework for Philanthropy offers a related guide through three connected roles. Partnership brings philanthropy, government, and communities together around shared priorities. Capital provides flexible investment when financing stands in the way of implementation. Power supports organizing so communities can shape priorities and hold institutions accountable. Together, these approaches can help public dollars go farther, public systems move faster, and communities build the power to expect and demand more from our government.
Some of the most concrete opportunities to put this approach into practice are local, where community priorities, public action, and investment opportunities can come together around a shared goal. Drawing on integrated capital approaches, different forms of capital can then be combined or sequenced based on what the opportunity requires. In New York City, NYF, MCF, and other foundations are beginning to explore this approach with the city, public agencies, and grassroots organizations, particularly around housing and child care.
Housing shows how the pieces come together. As distressed rent-stabilized housing changes hands, tenant organizing is building power to preserve affordability and advance community stewardship rather than lose more housing to speculation. Public partnership can bring government, philanthropy, and community groups together around preservation opportunities and the public policy and resources needed to make them viable. Flexible philanthropic capital can help bridge financing gaps when conventional financing is unavailable or moves too slowly.
Child care presents a similar opportunity. MCF’s $3M grant to the Child Care Action Fund, an initiative of the Mayor’s Fund to Advance New York City, supports partnership around expanded public investment in child care. Families, workers, and providers are helping shape that expansion through organizing, while flexible capital could help providers address upfront costs, facility needs, or gaps in public funding. Community organizing helps shape the system, government provides the scale, and philanthropy can help move resources and implementation more quickly.
These tools have worked together elsewhere. In Kansas City, MCF supported tenant organizing that helped win public investment for affordable housing in 2022, then later invested endowment capital in the bonds issued to help finance that commitment. This is a helpful illustration of grantmaking, public action, and investment capital reinforcing one another.
These local examples show one way grantmaking and investment capital can reinforce mission, but the same principle extends across the broader endowment. NYF has set a 10% carveout for local catalytic investments that can advance its Public Purpose Framework, while MCF is similarly exploring how investment capital can amplify its local grantmaking. Both also consider mission across the broader portfolio through investment screens, shareholder engagement, and asset-manager selection.
Shifting the Current: From Traditional Investing to Stewarding?
The examples also raise a broader question of what it takes to make this part of ongoing stewardship rather than a series of one-off investments. We asked Daniel Gould, MCF’s vice president of investments, and Lenore Champagne Beirne, NYF’s investment committee chair, to reflect on three questions that may be useful to foundation leaders and board members navigating how investment strategy can better serve mission.
Where should a foundation start if it wants the full endowment working toward mission?
Dan: Start with the portfolio you already have, not an investment product. Understand what you own, who manages it, where conflicts with mission exist, and where better-aligned options are available. There is no one “right way” to mission align a portfolio, so accept that your organization’s portfolio will look different than your peers’. Most importantly, connect your portfolio review to what grant recipients are organizing to change and where capital could help. Build your mission into your portfolio strategy rather than adding a few impact investments on the side.
Lenore: Start with a board-level review of what the endowment is being asked to do. Look at the foundation’s spending plan, time horizon, liquidity needs, current holdings, and where investments may conflict with mission. Then put those choices into the foundation’s investment policy statement and give staff and investment advisors a clear mandate on mission alignment, risk appetite, screens, potential catalytic allocations, manager selection, and where they have authority to act. Otherwise, conventional investment assumptions can end up setting the strategy by default.
What role should foundation leaders play in shaping investment strategy?
Dan: Foundation leaders can make sure investment conversations start with what the institution is trying to accomplish, not just portfolio performance. They can ask advisors to explain the assumptions behind recommendations, present meaningful alternatives, and show what different choices would mean for mission as well as financial capacity. Bringing program and investment perspectives into the same conversation also helps keep the endowment connected to the foundation’s broader strategy.
Lenore: As investment committee chair, I see my role as partnering with the president to bring mission, strategy, and what we are hearing from groups we support into investment discussions. In some foundations, investment strategy can sit somewhat apart from executive leadership and program strategy, which makes it harder to connect the endowment to the institution’s broader direction. The strongest approach brings the president, committee, staff, and advisors into partnership so mission context and financial expertise shape investment decisions together.
How can foundations connect capital more directly to what communities are building?
Dan: Foundations should look for places where grantmaking has helped create an opportunity but capital is still a barrier to implementation. That might follow an organizing victory, a new public investment, or a community-led development opportunity that now needs financing to move forward. Bringing program and investment perspectives together earlier can help identify those moments and determine whether another tool from the endowment could help carry the work from possibility to implementation.
Lenore: Boards can create the conditions for staff to act on these opportunities. At NYF, our investment policy statement sets a 10% target for catalytic investments that align with grantmaking and public purpose. In the Bronx, our grants supported years of organizing around the Kingsbridge Armory that helped secure its redevelopment as a community asset. We are now exploring catalytic financing to help turn that organizing victory into a viable community-led development. The point is to create a pathway for community priorities to inform where the foundation puts more capital to work.
Putting Wind in the Sails
Building on Dan and Lenore’s guidance, these three practices offer a practical starting point for foundations exploring how the endowment might play a greater role in advancing mission.
Start with the endowment’s role in mission: Give the full board space to ask what the endowment is for beyond generating resources for grants. Trustees are responsible for stewarding the foundation, including its endowment, in pursuit of its charitable purpose. That means considering what the endowment finances, where it may reinforce or conflict with mission, and how it can contribute to the foundation’s overall impact.
Build a bridge between grantmaking and investment opportunities: Create a regular way for program, investment, and leadership teams to identify where investment capital could amplify priorities already being advanced through grants. Depending on the opportunity, that might mean market-rate investments, catalytic capital, shareholder engagement, or another tool. Start with the goal the foundation is trying to advance, then ask which combination of resources and tools can best contribute.
Make mission part of the investment mandate: Once a foundation has established its direction, reflect it in the investment policy statement and in what the board asks of staff and investment advisors. This can include expectations around mission alignment, catalytic carveouts, manager selection, shareholder engagement, and decision authority. Advisors can then bring forward credible options, showing where alignment is possible and what different approaches mean for mission and financial performance.
When the Currents Converge
Mission alignment does not require foundations to set aside financial objectives. In many cases, both can be pursued together. Where a foundation accepts greater risk, less liquidity, or lower returns, that choice should reflect the mission value the investment can unlock.
Returns also should not be considered independent from how they are generated. If investments contribute to the conditions a foundation’s grants are trying to change, stronger performance may not translate into greater impact overall. In the charitable context, fiduciary stewardship means considering financial performance alongside how investment decisions support the foundation’s charitable purpose.
A tidal foundation brings these choices together. Payout, investments, and the foundation’s broader influence can play different roles while reinforcing the same mission. The point is not to make every dollar do the same job, but to steward the whole institution with greater intention and alignment. That is the full current of capital.
Carmen Rojas is president and CEO of the Marguerite Casey Foundation. Rickke Mananzala is president of the New York Foundation. Daniel Gould is vice president of investments and operations at Marguerite Casey Foundation. Lenore Champagne Beirne is investment committee chair at New York Foundation
This is the third piece in the tidal foundation series. The final piece, “A Growing Tide,” will widen the lens to foundations already practicing different forms of tidal stewardship and what their approaches reveal about a broader shift in philanthropic stewardship.
