Australian trusts and foundations are part of an estimated $4 trillion pool of active investors, stewarding a significant share of capital. For these organisations – and others - committed to funding for impact, these funds carry enormous potential to contribute to social and environmental outcomes beyond grant-making alone. Despite this scale, the transition towards aligning investments with charitable purpose has been comparatively slow in Australia, particularly when measured against global peers.
These considerations are not confined to trusts and foundations. Australia’s superannuation system is projected to hold more than $8 trillion by 2035 and there are similar demands on considering the impact of their investing.
At PRF, we're pleased to share our updated Investment Policy Statement (IPS), approved in late 2025, in the hope that it stimulates interest, discussion and action towards mobilising greater capital for impact.
Where we started
PRF formally adopted a Total Impact Approach in 2023, embedding sustainability considerations into the way our endowment is invested across the whole portfolio, not just a small allocation set aside for impact investments. This marked a significant governance shift. For the first time, PRF’s IPS articulated core commitments to responsible investing, including impact objectives, negative screening, stewardship, fund manager selection and reporting.
From the outset, this approach was understood as an initial step rather than a finished product. We recognise that moving towards total impact is a journey that requires learning, iteration and adaptation as internal practice matures and as markets evolve. Accordingly, PRF’s practice has evolved since we adopted our first IPS under a total impact framework. Annual audits of the investment portfolio (publicly shared through our Responsible Investment and Sustainable Investment Reports) have played a central role in this development by providing transparent insights into portfolio alignment, exposure and progress.
We’ve also learned from engagement with our global peers. Internationally, a number of foundations have demonstrated how responsible and impact investing principles can be integrated at scale, offering both inspiration and practical reference points. These influences, combined with internal reflection, culminated in the approval of our revised Investment Policy Statement in November 2025, building on the foundations laid in IPS v1.
What’s changed in our new Investment Policy Statement
The updated IPS introduces several changes designed to strengthen both impact integrity and practical implementation.
First, PRF has expanded its negative screening framework. Rather than relying on a single set of exclusions, the new policy applies a two tier system based on materiality thresholds and extends exclusions to include indirect exposures, such as those held through pooled funds. This addresses a key limitation identified through earlier audits, where indirect holdings could dilute the effectiveness of exclusionary screens.
Second, the revised IPS introduces a positive screening approach. This represents a deliberate shift from focusing solely on risk mitigation through exclusions toward actively recognising and targeting investments that benefit from sustainability tailwinds.
Third, PRF has increased the target allocation to its Endowment Impact Fund to 20 per cent of the investment portfolio. This allocation is dedicated to impact funds seeking risk adjusted financial returns alongside demonstrable social or environmental outcomes.
The Endowment Impact Fund itself has also evolved. Under the new IPS, it is treated and recognised as a fund in its own right, with greater sophistication in governance, reporting and portfolio construction. As of March 2026, the fund stands at $150 million in commitments, reflecting both portfolio growth and increased organisational confidence in impact aligned strategies.
Finally, the revised IPS deliberately simplifies language where possible. This was an intentional design choice to improve accessibility, recognising that overly technical or opaque policy documents can become a barrier to informed decision making.
Why transparency matters
Impact and sustainable investing are complex and evolving fields, and hundreds of guides already exist outlining what directors, trustees, and advisors should consider when developing an Investment Policy Statement. Yet only a handful of foundations globally make their IPS publicly available, allowing others to review, adapt or build on them.
This lack of transparency creates a practical barrier to action. One of the most common challenges we hear is that boards, investment committees and advisors lack confidence in how impact and sustainable investing concepts can be translated into a workable IPS. Without real world templates to work from, many organisations stall.
By publishing our IPS, we seek to reduce this barrier. The intention is not to present a definitive model, but to offer a concrete example that others can review and borrow from in support of their own governance conversations. In a sector where assets continue to grow and community needs remain pressing, accelerating learning and action matters.
