Program Related Investing
Investments made by foundations that meet the philanthropic goals of their programs. To be counted in the grant-making portion of a foundation’s assets, program related investments must also abide by tax laws regarding charitable intent and the relationship to a foundation’s program.
Patient Capital
Investment strategies that provide social and environmental returns in addition to financial returns with an emphasis on returns over the long-term. While a longer investment horizon and/or a smaller financial return may be inherent in individual patient capital investments, neither of these conditions are required of patient capital investments.
Unintended Consequences
Results from actions that were not expected or intended. Unintended consequences are often negative and are due to systems being more complex and interconnected than we may realize—especially environmental and social systems. The Precautionary Principle is an attempt at helping individuals, organizations, and societies to be more mindful of the effects of their decisions before […]
Thermohaline Conveyor
A global water circulation system driven by water temperature and salt-density that distributes water between the Earth’s oceans. Warmer water closer to the ocean’s surface travels from the northern Pacific Ocean, south through the Indian Ocean (where it is joined by more warm water), around the southern tip of Africa, and up to the northern […]
Governance
The systems and processes of management that govern an organization’s behavior and conduct. Governance covers accountability, auditing, transparency (openness), reporting and disclosure, responsibilities and representation of various stakeholders (including shareholders, board of directors, advisory boards, employees, etc.) as well as charters, by-laws, and policies document the rights and responsibilities of all parties. Governance often includes […]
Blended Value
A term coined by Jed Emerson at Stanford University to describe social, financial, and environmental value created by all organizations’ activities (whether non-profit or for-profit). When investors acknowledge these value components, they can be more focused about their investments in organizations that create the mix and amount of value that matched their own values. Resources: […]
Payback Period
An accounting term indicating the time required to recoup an investment. It is expressed as a ratio of investment cost to savings or income (usually annually). For example, if a new high-efficiency boiler costs $10,000 to install and saves $2500 per year in fuel, the payback period is four years. Payback periods are critical to […]
Carbon Footprint
The total amount of greenhouse gases emitted directly and indirectly to support human activities, usually expressed in equivalent tons of either carbon or carbon dioxide. Carbon footprints are calculated by countries as part of their reporting requirements under the Kyoto Protocol, as well as by companies, regions, or individuals. Direct greenhouse gas emissions can include […]
Market Failure
A market’s inability to create maximum efficiency, by not properly providing goods or services to consumers, not efficiently organizing production, or not serving the public interest. The term does not refer to the collapse or demise of a market, but instead to the unintended and unwanted consequences of decisions made by economic actors. A variety […]
RoHS Directive
The Restriction of Hazardous Substances directive is EU legislation that bans the sale of electrical and electronic products containing specific toxic contaminants: Lead, Mercury, Chromium, Cadmium, Brominated flame retardants (PBBs & PBDEs) in amounts exceeding set Maximum Concentration Values (MCV). Producers (manufacturers, sellers and resellers of own-brand equipment, and importers and exporters) must demonstrate compliance […]
