Although the good works done by foundations are usually in the grant-making area, lately an SRI mindset is also occurring on the investment side, says Page Snow, senior VP of foundation services with FoundationSource, a company that provides an outsourced method of setting up and running private foundations .

As younger generations take a more active role in family foundations, Snow says she has seen a shift from screening out companies for negative reasons to actively seeking profitable companies with strong environmental records. The goals and ideals of the foundation are now not only being used for guidance in choosing beneficiaries, but also to select how the foundation invests its endowment.

“It’s a little disingenuous to have this bifurcation on the investment side versus the programmatic side,” she says. “One thing that might be spurring this change is that a number of foundations have been very public that a certain percentage of their investments are toward mission-related investments or socially responsible investments and they’re getting as good if not better returns than from their other investments.”

Snow defines mission-related investing as an investment in a company, possibly run by members of an economically disadvantaged group who would not qualify for traditional financing, that generates financial as well as social returns that are in line with the foundation’s stated mission.

Another example Snow raises was a foundation that had a grant-making program in sustainable agriculture. They invested in Stonyfield Farms, which is an organic yogurt producer that buys its milk from family farms. “The other thing we’re seeing is program related investments, which is not from the investment side, it actually comes out of their grant-making pot. Program-related investments are giving loans rather than grants to individuals or organizations.”