Kristin Hull Trustee, Hull Family Foundation. 's presentation from the 2009 Take Action! Impact Investing Conference in San Francisco.

1. FROM INTENTION TO ACTION:
GETTING STARTED IN MISSION
INVESTING
KRISTIN HULL

2. Overview
 Context and background
 Creating a plan to get started
 How we do it
 Our portfolio
 What’s next

3. Context and background
 Progressive, socially minded family with strong philanthropic
interests
 Separate vehicles for family office (internally managed) and
family foundation
 Family background in financial services and investing
 Early stage of development of shared mission and vision for
family foundation
 Interest in expressing values and driving impact through
investing, but hard to get started
 Difficult finding an entry point
 Sense that needed a clearly defined shared mission and vision for
the foundation before getting started

4. Process we used
Step 1: Flesh out goals and Step 2: Develop strategy Step 3: Implement
parameters •Allocation - how much over which •Proceed with
•Discuss financial targets period of time from which buckets execution of initial
and requirements both •Goals - what are financial goals, targets identified in
absolutely and relative to liquidity needs, and key risk strategy development
rest of the portfolio parameters for the allocation and session
•Liquidity Produce as a part of the overall portfolio •Create expanded
illustrative •Process - Who will be involved in “short” list of managers
•Duration
inventory of which ways? How will the “team” and offerings for
•Return expectations/ potential
benchmarks function to implement the strategy, market-based
products and
•Determine key social managers to deploy the capital, and manage opportunities
priorities support the portfolio •Conduct outreach and
•Issues strategy •Staging - How will capital be (when appropriate)
development drawn as part of the target structure for mission-
•Geographies
•Identify operational allocation? Is a near term cash driven opportunities
priorities management solution required? •Support diligence,
•Hands on vs. hands Or will existing positions be manager selection,
off for the family and liquidated only as new transaction structuring,
Matlock investments are made? and execution as
•Direct vs. through •Initial targets - identify some desired
managers and funds quick wins - some investments
that can be pursued and executed
quickly

5. Getting started
 Use mission investing to help support development of foundation
mission and vision rather than wait for vision before getting
started
 Begin with foundation assets vs. family office…
 …but have context of overall asset allocation across the two
buckets
 Focus on fixed income
 Expectation of future contribution allow for target of capital
preservation {this turned out to be a good asset allocation bet)
 Tax efficiency
 Robust set of opportunities
 Good way to get started, get early feedback, and preserve option
value (vs. real estates or venture capital)

6. Concept
 Diversified pool of deep impact investment opportunities
 Return target is inflation + 1% (preserve real giving
power)
 Weighted towards self-liquidating instruments (loans;
debt funds) with a smaller proportion of illiquid
instruments with high impact leverage

7. Approved Allocation
Portfolio Element Target Allocation
Safer  Liquidity: Pool of highly liquid, secure,  $1-3 MM depending on
More liquid market-rate, mission investments anticipated liquidity need
designed to generate impact while
preserving liquidity for foundation
check-writing
 Core: Professionally managed,  $10-14 MM in a separate
market-rate portfolio benchmarked to managed account
commercial standards (e.g. Lehman
agg) - diversified, flexible exposure to
areas of interest
 Private Placements: Opportunity to  $3-5 MM: 4-6 transactions at
invest more narrowly in high impact $500k - $1 MM
opportunities of interest
Riskier  Direct: Most targeted - direct loans to  $750k-$1.5 MM: 2-4 transactions
Less liquid groups with strong mission fit at $250k-500k
-7-

8. Where we are
 Approval to invest foundation in 100% mission fixed income
 $11.5 MM in new mission investments made ($12.8 MM approved)
across issues including:
 Independent progressive media
 Affordable housing
 Green jobs
 Balance of “uninvested” funds are still driving mission impact at
ShoreBank
 Voted proxies for broader family office holdings
Hull Family Foundation is 100% invested in mission – in the process
of investing mission deposits in more direct deals across impact
areas and geographies

9. Our portfolio
 Invested/executed
 Community Capital Management: $10 MM managed, “green” community bond
separate account
 One California: $1 MM insured deposit
 Public Radio Capital: $250,000, 3 years at 3%
 Habitat for Humanity: $246,000, 7 years at 5% to support home ownership for deeply
disadvantaged families
 Proxy Voting: Voted proxies on 100+ companies in Savant portfolios
 ShoreBank
 Committed
 BRAC Africa: $1 MM investment in 4 year 8% notes to fund African expansion of
leader microfinance organization

10. What’s next?
 Pipeline transactions under review
 Root Capital: Finance for fair trade coops in the developing world
 Blue Orchard: Leading lender to MFI’s
 Barefoot Power: Working capital for solar lantern company serving
East Africa
 Renewable Funding: Mezzanine line for household solar and energy
efficiency finance company
 Expand beyond fixed income and beyond the foundation
 Family office?
 Social venture capital?