The bulk of philanthropically committed capital is invested in publicly traded securities or private markets for maximum returns.

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In the United States, nearly $1 trillion is committed to philanthropy — sitting in foundations and donor-advised funds. Donors have transferred ownership of these funds to separate legal entities and received generous tax deductions in order for those moneys to fund charitable work in the world.

Yet only a small percentage of those funds is expended on charitable donations for the public good. The great majority of those resources are invested for a financial return without regard to the impact on society.

Philanthropically committed funds are traditionally divided into two silos: grants for social impact and investments for financial growth.

Grants to nonprofits are designed to maximize social impact by providing critical support to worthy causes. They can be viewed as a “social investment” with a 100 percent negative financial return for the donor. Once given, the funds never come back. Yet, such funds are essential to enable nonprofit organizations to achieve their missions.

Innovative approaches to grant making such as program-related investments can result in great benefit to nonprofits and a recycling of grant money to enable foundations or donor-advised funds to have even greater impact.

Invested funds are another story. The bulk of philanthropically committed capital is invested in publicly traded securities or private markets for maximum returns.

However, like grants, those investments may affect a variety of social issues, such as the environment, immigration, labor practices, food, education, resource consumption, gender pay disparity, health and health care, or fighting human trafficking or discrimination. Sometimes, foundation or donor-advised fund investments actually counteract the very mission for which the funds were donated.

Recently, philanthropic and investment leaders have come to recognize that grants and investments can have both financial returns and social impact — and that strategic alignment and integration with mission is important to maximize real change.

Examples include:

• The divestment of the $860 million Rockefellers Brothers Fund, built on oil wealth, from all of its fossil-fuel investments.

• The $24 billion Yale University endowment directing its money managers to examine how investments affect climate change and avoid investing in companies not taking steps to reduce greenhouse-gas emissions.

• The $260 million F.B. Heron Foundation focused on helping disadvantaged communities, aligning 100 percent of its capital with its mission.

• The $3.5 billion Kresge Foundation, committing 10 percent of its endowment into impact investing over the next five years.

• The $170 million Wallace Global Fund is one of 17 foundations (with assets totaling $2 billion) divesting fossil-fuel stocks from their portfolios and investing instead in clean energy. “It is not enough to award grants to good causes,” the fund states. “To have real impact, we must put our money where our mission is.”

Companies that take the social and environmental impact of their businesses into consideration when developing business strategy can generate both financial and social returns. The evidence shows that, if done well, adding social and environmental impact into investment criteria results in no financial sacrifice and may well enhance returns.

With more than $6.5 trillion of philanthropic and other capital now invested using various impact criteria, “impact investing is a mainstream trend with sustainability factors serving as risk mitigation in the management of traditional portfolios,” said Jed Emerson. “More asset owners will be looking at how social and environmental factors will affect performance, and how such financial performance can be used to drive social impact.”

Emerson is a pioneer in the field of impact investing and originator of the Blended Value concept. He also is co-author of the book “The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism.”

Philanthropic capital, already committed to making a difference in the world, should be holistically examined to make sure that it is not defeating the donor’s mission and is actually advancing the causes that inspired the donor to give in the first place.

Ask the manager of your philanthropic capital, “Where is my money spending the night?” Ask yourself deeper questions about the social impact of those philanthropic investments. You may be surprised at the answers.