This category includes articles about people, firms and foundations that invest in social good by investing in social entrepreneurs, social impact or pay-for-success bonds, etc.
This category includes articles about people, firms and foundations that invest in social good by investing in social entrepreneurs, social impact or pay-for-success bonds, etc.
The in-depth study of guarantees in impact investing includes case studies featuring key industry players the Kresge Foundation, Citi, Fannie Mae, and more.
Press Release – NEW YORK, April 25, 2017 – A study published today by the Global Impact Investing Network (GIIN) takes an in-depth look into the application, benefits, and scalability of financial guarantees in impact investing. Scaling the Use of Guarantees in U.S. Community Investing provides examples of how guarantees have been successfully used to leverage additional capital into high-impact deals, allowing investors with varying risk appetites to productively engage in impact investing.
The report shows how impact investors are utilizing guarantees as a credit-enhancement tool to stimulate increased private-sector investment in solutions to social and environmental problems.
Key findings of the research include:
The research includes cases studies that showcase the use of guarantees and other unique deal structures:
The report also includes a list of key considerations to be used in structuring a guarantee. This resource was developed by leading practitioners who participated in the GIIN’s Guarantees Working Group, comprising 34 individuals representing 23 organizations.
This report was produced with the support and guidance of the Kresge Foundation.
“The use of guarantees is not new in impact investing, but this valuable tool is extremely underutilized,” said Amit Bouri, CEO and co-founder of the GIIN. “Increased awareness of successful examples of investor collaboration through guarantees—and blended capital more broadly—could help spur much-needed, additional investment into solutions to pressing social and environmental problems. There is an enormous opportunity for different types of investors to collaborate to amplify impact.”
About The GIIN
The Global Impact Investing Network (GIIN) is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing around the world. Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon the circumstances. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. For more information, please visit www.thegiin.org.
“Most severe attack on shareholder rights in 50 years,” says one investor; new investor research paper outlines wide-ranging benefits of shareholder proxy tool
Press Release – WASHINGTON, DC, April 24, 2017 – Many of the country’s largest investors are coming out strongly against proposed legislation that would prevent most investors from being able to file shareholder proposals with companies on key issues they want further action on, such as board governance matters, corporate policies or emerging risks like climate change.
The proposal, part of a larger bill aimed at replacing the Dodd-Frank Act, would sharply raise the ownership threshold for investors who could file shareholder proposals that are voted on at corporate annual meetings. Shareholders would need to hold a minimum of 1 percent of the company’s outstanding stock for three years to file resolutions. Currently, shareholders with as little as $2,000 in shares for a year or more can do so.
The proposal by House Financial Services Chairman Jeb Hensarling (R-Texas) would undo a shareholder proposal process that has been in place for a half century. In effect, even the nation’s largest institutional investors, including the nation’s largest public pension funds, would not be able to file shareholder resolutions with companies. A hearing on the bill is scheduled for Wednesday, April 26.
“This misguided legislation would greatly diminish shareholders’ ability to protect and enhance their investments and drastically reduce corporate accountability,” said New York State Comptroller Thomas P. DiNapoli, trustee of the $186 billion New York State Common Retirement Fund, which has filed dozens of resolutions in recent years asking companies to assess their climate change risks and develop mitigation strategies. “The Common Retirement Fund’s positions in individual companies are in the tens or hundreds of millions, with some over $1 billion, which makes it outrageous and inequitable that we would not be able to make requests of corporate boards through shareholder resolutions.”
“It makes no sense to dramatically change a process that doesn’t need changing, seeks to undermine the fundamental right investors’ have to ensure their publicly invested dollars are being used ethically and is in every shareholder’s and the company’s best interest,” added Anne Sheehan, director of corporate governance at the California State Teachers’ Retirement System (CalSTRS). “The damage it will do to shareholder/company relations is just chilling.”
“This is the most severe attack on shareholder rights in 50 years. It would virtually end investors’ ability to file shareholder resolutions with companies,” added Timothy Smith, director of environmental, social and governance shareowner engagement at Walden Asset Management.
A research paper released today by three investor groups, collectively managing trillions of dollars in assets, outlines numerous benefits investors have seen from the shareholder proxy tool, including inclusion of more independent board directors, stronger disclosure on political spending, widespread adoption of international human rights principles and wide-ranging actions to mitigate climate change risks. Last year, investors filed about 1,000 shareholder proposals with companies, including about 500 focused on corporate governance issues and more than 400 focused on environmental and social issues.
“The process as currently structured and administered works well for investors and issuers; it is fair, efficient and effective,” concludes The Business Case for the Current SEC Shareholder Proposal Process, issued by Ceres’ Investor Network on Climate Risk and Sustainability, the Forum for Sustainable and Responsible Investment (US SIF) and the Interfaith Center on Corporate Responsibility. “We believe the proposed modifications would harm the interest of investors, companies, society and the capital markets.”
“For seven decades, the shareholder proposal process has worked for companies and investors,” Sheehan said. “It’s been an equitable way for large and small investors to communicate their concerns to public companies.”
“The shareholder proposal is a critical tool to help us get the attention of senior management,” said Adam Kanzer, managing director of Domini Impact Investments, adding, “The quality of one’s ideas is not correlated with the size of one’s investment.”
“The shareholder proposal language in the bill is clearly an overreach,” said Jonas Kron, senior vice president at Trillium Asset Management. “For example, raising the ownership requirement to 1% would leave only 11 investors with enough shares to file shareholder proposals at Wells Fargo. None of those investors have ever filed a shareholder proposal. In the meantime, smaller, but no less important, institutional investors in Wells Fargo have filed strongly supported proposals on a range of very important governance and management issues that should be raised with Wells Fargo management and directors.”
About US SIF
US SIF: The Forum for Sustainable and Responsible Investment is the leading voice advancing sustainable, responsible and impact investing across all asset classes. Our mission is to rapidly shift investment practices towards sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. US SIF members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, community investing organizations, nonprofit associations, and pension funds, foundations and other asset owners. US SIF produces a highly regarded conference each year. A New Climate for Investing in Impact will be held in Chicago from May 11-12. Learn more at www.ussif.org.
New ReFED Innovation and Policy Tools prove food waste reduction creates businesses and jobs; reveal opportunity to simplify regulation
Innovator Database tracks more than 400 commercial and nonprofit organizations that fight food waste while creating more than 2,000 new jobs. Over the last 5 years, more than 200 organizations have been founded, doubling the pace of innovation in food waste reduction.
Policy Finder identifies opportunities to simplify federal and state policy to prevent food waste. For example, 43 states could remove burdensome date labeling restrictions, saving consumers and businesses more than $29 billion per year.
Press Release – San Francisco, CA (April 18, 2017) – Today, ReFED, a collaborative, cross-sector nonprofit committed to reducing the $218 billion of food waste in the United States, unveiled two new tools: a database of innovative food waste solutions, and an interactive map that centralizes federal- and state-level food waste policy to assist advocates and policymakers.
“ReFED’s 2016 Roadmap to Reduce U.S. Food Waste identified concrete opportunities to save money and resources, feed people and create jobs,” said Chris Cochran, Executive Director of ReFED. “The Innovator Database and Policy Finder build on the Roadmap by creating a one-stop shop for stakeholders interested in understanding food waste policy and innovation – two levers that have the power to make change across sectors. These tools reveal that food waste reduction is both a source of viable, scalable business enterprise and a potentially significant job generator.”
ReFED’s Food Waste Innovator Database [refed.com/innovators]– a living compilation of 400+ commercial and nonprofit entities focused on reducing and preventing food waste – enables users to explore the dynamic and expanding food waste innovation sector, with solutions broken down by type and geography. The database will also help connect innovators to the private sector, government, foundations and investors to collaborate, fundraise and accelerate impact.
The fastest growing solution areas include donations, new products, and secondary marketplaces for food that would otherwise be sent to the landfill. Most innovators in ReFED’s database are for-profit (70%) with services offered nationally (55%), representing an emerging opportunity. ReFED will use existing insights and new data gleaned from the database to identify trends, growth areas and gaps in food waste innovation, ultimately helping drive development of more efficient, scalable solutions.
ReFED’s Food Waste Policy Finder [refed.com/policy] features an interactive map allowing users to navigate the landscape of federal and state laws and policies. Developed in partnership with Harvard Law School’s Food Law and Policy Clinic, the Policy Finder will help food businesses and food recovery organizations better navigate laws on liability protection, date labeling, tax incentives, animal feed and waste bans. At the same time, the tool highlights inconsistencies in existing legal frameworks and the opportunities for state and federal action.
“To reach the national 50 percent food waste reduction target, we need supportive policies at all levels of government. This year, more than a dozen states are considering new food waste legislation,” said Emily Broad Leib, Assistant Clinical Professor of Law at Harvard Law School and Director of the Food Law and Policy Clinic. “We hope this tool will help businesses and food recovery organizations better understand the applicable laws so that they can make better food recovery decisions, while also helping policymakers implement better laws and even experiment with new policies to reduce the waste of healthy, wholesome food.”
The tool affords unique insight into the state-level policy landscape, revealing positive trends in implementation, while highlighting clear opportunities for common-sense policy improvements. For instance, nearly half of all states have enacted food donation liability protections above the federal baseline, encouraging businesses to donate foods that might otherwise be wasted. On the other hand, of the ten states that generate the most food waste, California is the only one to offer state-level tax incentives to promote food donation, and is the only of the top ten food waste-generating states to accelerate the adoption of food waste solutions by establishing an organics waste recycling law.
“Tools like the Innovator Database and Policy Finder give public and private sector stakeholders the insights they need to make smart decisions that generate the most impact,” said Devon Klatell, Associate Director at The Rockefeller Foundation. “Food is wasted at every broken link in the supply chain, giving all of us a role to play in tackling this critical issue. Repairing those links depends on collaboration across sectors, and we need organizations like ReFED to identify and encourage the opportunities to do so.”
The new ReFED tools will build upon existing resources by more clearly identifying opportunities for impact. For example, the ReFED Roadmap estimates that of the $18 billion in new financing needed to achieve a 20% food waste reduction in the U.S., $800 million will come from private early-stage and growth equity, and $1 billion from philanthropic impact investments.
“Meeting our national food waste reduction goal depends on the entrepreneurial spirit of innovators, action across the food system, and the strong commitment of funders like The Rockefeller Foundation and Walmart Foundation, and many others. We hope these tools will convene stakeholders who haven’t – or otherwise wouldn’t – collaborate on food system challenges, and guide them to use insights, backed by robust economics and data analysis, to identify proven solutions to immediately cut food waste,” said Cochran.
ReFED is a multi-stakeholder nonprofit, powered by an influential network of the nation’s leading business, nonprofit, foundation and government leaders committed to reducing U.S. food waste. It takes a data-driven approach to move the food system from acting on instinct to insights to solve our national food waste problem. Solutions already exist to cut food waste by 20% nationwide as identified from the Roadmap to Reduce US Food Waste. ReFED has revolutionized the way the industry looks at food waste, by going beyond challenges to identify concrete opportunities to save money and resources, feed people and create jobs. In addition to the Roadmap, ReFED’s tools and resources help businesses, nonprofits, government, and investors put the most impactful solutions to reduce food waste into action and makes it easier for the food supply chain to meet the national 50% reduction goal by 2030.
Four early adopters have gone live on the FinTech platform dedicated to Impact Investing
Press Release – APRIL 19, 2017 — Washington, D.C. — Financial technology provider ImpactUs today announced the onboarding of the first issuers to its impact investing platform, ImpactUs Marketplace. The Marketplace is a community-driven full-service platform offering institutions, individuals and financial advisors an extensive range of private impact investing opportunities.
The four early-adopter issuers* on the platform are mission-driven institutions dedicated to building strong, healthy and successful communities.
*Some of these issuers’ offerings are only available to accredited investors. Investing in private investments requires high risk tolerance, low liquidity concerns, and long-term commitments. Investors must be able to afford to lose their entire investment.
Currently in a limited access, invite-only launch phase, ImpactUs Marketplace is open to accredited investors provided with designated access codes. Those interested in signing up for an invitation to the platform can request a demo and access code at www.ImpactUsMarketplace.com.
Led by impact investing veterans Reginald Stanley and Liz Sessler, ImpactUs provides the advanced infrastructure to seamlessly connect investors and advisors with mission-driven institutions, providing end-to-end transactional and capital management capabilities. As a broker dealer, ImpactUs harnesses technology to make impact investing accessible to all.
The foundational support necessary to launch ImpactUs was provided by some of the leading organizations in the social impact sphere, including MacArthur Foundation, Ford Foundation, Enterprise Community Partners and City First Enterprises.
“We are incredibly excited to onboard our first set of issuers to ImpactUs Marketplace,” said Reginald Stanley, CEO of ImpactUs. “These mission-driven institutions are an absolute crucial component to our community and have been key partners in building our shared vision of harnessing advanced technology to simplify and grow impact investing.”
“Collaboration and community has always been core to ImpactUs’ mission,” said Liz Sessler, Vice President of ImpactUs. “As such, we’re happy to welcome our first set of issuers to the platform so that impact investors can begin investing in positive changes to communities worldwide.”
ImpactUs Marketplace simplifies the impact investing process. It provides investors, advisors, and impact organizations greater choice and reduced costs while directing more capital to funds and projects that deliver community, societal, and environmental benefits. Every day, ImpactUs connects investors with purpose, creating more equitable and thriving communities.
The information contained in this press release does not constitute an offer or solicitation and may not be treated as an offer or solicitation (i) in any jurisdiction where such an offer or solicitation is against the law; (ii) to anyone to whom it is unlawful to make such an offer or solicitation; (iii) if the person making the offer or solicitation is not qualified to do so. The issuers named in this press release can only be marketed in certain jurisdictions only.
All securities related activity is conducted through ImpactUs Marketplace LLC a registered broker-dealer and member FINRA/SIPC, located at 1875 Connecticut Ave., NW 10th Floor, Washington, DC 20009. ImpactUs does not make investment recommendations and this communication should not be construed as a recommendation for any security offering named in this press release. Private investments are only suitable for investors who are familiar with and willing to accept the high risk associated with private investments. Securities sold through private investments are not publicly traded and are intended for investors who do not have a need for a liquid investment.
Press Release – Philadelphia/ New York/ London, 12th April 2017: A team from INSEAD triumphed this weekend at the finals of the MIINT competition – the culmination of a six-month impact investing course run by Bridges Fund Management, a specialist sustainable and impact investor, and The Wharton School of the University of Pennsylvania.
Now in its sixth year, the MIINT (MBA Impact Investment Network & Training) is an experiential learning course that gives business and graduate school students a hands-on education in impact investing. This year’s MIINT course was the most ambitious to date, attracting more than 500 students from 25 leading schools around the world.
The culmination of the programme is the annual finals weekend at The Wharton School in Philadelphia, where the top student teams gather to network and pitch a live impact investing opportunity to a panel of expert judges – who this year included representatives from ReThink Education, Golden Seeds, Wonder Ventures, Omidyar Network, Bank of America Merrill Lynch, Bamboo Capital Partners, Prudential, Deutsche Bank, , Bridges Fund Management, LiquidNet for Good, and the Moelis Family Foundation.
After an intense two-day competition involving 125 students, the team from INSEAD– which was competing for the first time and included representatives from its Fountainebleau and Singapore campuses – won the Best Impact Investment Award, for its presentation on an India-focused healthcare training business. The team wins a potential $50,000 investment from Liquidnet and the Moelis Family Foundation, as and when the company completes a funding round of $500k (subject to final diligence).
The two runners-up – who both win a potential $25,000 investment from Liquidnet and the Moelis Family Foundation – were the Kellogg School of Management (Northwestern), who presented a telehealth platform improving access to mental health services in the United States, and the Fletcher School of Law and Diplomacy (Tufts), who presented a company seeking to improve access to credit for smallholder farmers in Pakistan.
The ‘Best Diligence’ award went to the Ross School of Business (University of Michigan), for its evaluation of a company that is trying to reduce medical errors with a mobile platform for health care professionals in the U.S..
The MIINT program has continued to expand and evolve since its launch in 2011. This year’s course introduced a Certificate of Completion from Wharton, plus additional support and networking opportunities in New York, San Francisco and London, and improved impact training as part of the online curriculum.
An Expert In Financial Services And Sustainability, Bosse Will Bring Her Knowledge And Experience In Global Business To The GIIN
Press Release – April 11, 2017 – The Global Impact Investing Network (GIIN) today announces the appointment of Christine Bosse as its newest Board member. Christine is an experienced executive who has served on the boards of both financial services and nonprofit organizations. Alongside her role on the GIIN’s board, Christine will retain her positions as a board member for several international companies such as Allianz and TDC. Christine also serves as Board Chairman for BankNordik and TELE Greenland. The GIIN will benefit significantly from her strong leadership and experience in helping global companies sustainably grow and prosper.
“It is an honor to welcome Christine as our newest Board member,” said Amit Bouri, CEO and co-founder of the GIIN. “Christine’s robust experience in the financial sector, her devotion to social and environmental causes, and her passion for innovation, growth, and sustainable businesses will make her a valuable addition to the GIIN’s board. Her international management expertise and experience in the Nordic region are great assets for the GIIN’s global mission.”
Previously, Bosse served as group CEO for Scandinavian insurance company Tryg for nearly a decade. Under her stewardship the company became one of the most profitable and efficient Nordic insurers. In addition to charting significant growth at Tryg, Bosse has also worked to promote general economic development in the Nordic region.
Bosse’s experience leading nonprofits runs just as deep as her financial services leadership. She serves as Chairman for BØRNEfonden and the Danish European Movement. In 2010, Christine was appointed the Advocate for the Millennium Development by UN Secretary General Ban Ki-moon and has been twice named one of the ‘Most Influential Business Women in The World’ by the Financial Times.
Christine joins new Board Chair Mark Grier of Prudential on the GIIN’s Board of Directors, alongside GIIN CEO and co-founder Amit Bouri and other global business leaders.
“I am excited to join the GIIN to help advance the growth and effectiveness of impact investing around the world,” Bosse said. “The GIIN is the world’s foremost impact investing authority and I look forward to contributing to the GIIN’s important mission and helping to further realize the tremendous potential of the impact investing market.”
About the Global Impact Investing Network
The Global Impact Investing Network (GIIN) is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing around the world. Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending upon investors’ objectives. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. For more information, please visit www.thegiin.org.
Press Release – New York, NY, April 7, 2017 – New York based investment and holding company Magna that operates across multiple platforms ranging from global equities (Magna:equities), early stage private initiatives (Magna:ventures) and entertainment production and financing (Magna:entertainment) has now launched the Magna:initiative, a charitable arm of the company simply seeking to foster future generations of impactful entrepreneurship through the support of creative development and exploration at an early age; providing more children an opportunity to create music, play in bands and explore their own creativity. Something needed now more than ever as federal funding for the arts continues to decline.
“At Magna, we strongly believe a foundation of creativity, collaboration and the quest to inspire are at the core of any successful entrepreneur,” noted Magna Founder & CEO Josh Sason, who himself was a touring musician before founding the global investment firm at 22 he still leads. “In our view, there’s no better way to foster the development of these traits than through music; and specifically the experience that comes with playing in bands and creating the music that you love,” he concluded.
Starting strong out of the gate, the Magna:initiative has already partnered with two leading entrepreneurial educational institutions, BerkleeICE and Hofstra University, Sason’s alma mater, to solidify the Initiative’s thesis and create momentum to drive opportunities forward supporting the connection between the arts and successful entrepreneurs.
The collaboration between BerkleeICE and Magna will result in a thoroughly researched white paper that will substantiate the fact that music studies and a pursuit of music in the developmental years contributes to a higher propensity for impactful entrepreneurship later in life; something Sason firmly believes rings true about himself.
At Hofstra, the Magna:initiative has underwritten a new program within the university’s school of entrepreneurship focused around what the future of music and record labels could look like. This will once again allow students with a passion for music to see more clearly the connection between creativity and future business opportunity.
Sason’s goal for the Initiative is to “give back in a meaningful way.” Through the giving of money, time, energy and expertise, the Magna:initiative will first and foremost provide more children the opportunity to learn and create music that they enjoy in a collaborative manner with the foresight of how it contributes to greater opportunities in the future. In addition to the universities mentioned, benefactors may include the likes of the Grammy’s Foundation and Little Kids Rock. Beyond music, Sason will use the Initiative as the central vehicle for all of his philanthropic pursuits, which include active participation in Defy Ventures, The Jack Brewer Foundation and Charity:Water.
Throughout Magna’s tenure, the company’s open-minded approach to new ideas and unconventional opportunities has enabled its redefinition of the meaning of smart, meaningful investing – a sentiment that will carry over to the Magna:initiative in its pursuit towards harnessing creative instinct and habits to inspire the impactful entrepreneurs of tomorrow.
Scott County, IA sees 61% lift in recycling and more than $100,000 in new savings and revenue for municipalities in less than a year.
Press Release – The recycling lift came from surprising places in Scott County where they have seen a 61% increase in just the first year after the Closed Loop Fund and the County invested $10.75mm in new infrastructure, including recycling carts and a newly upgraded county owned and operated MRF.
The Commission expected to see a sizable lift in volumes of recyclable materials coming into its MRF due to the new full size recycling carts in Davenport and Bettendorf. However, the Commission has also been surprised by how much new material is coming from nearby communities, indicating that the Quad Cities region had previously been underserved with no nearby single stream MRF. Now materials that used to travel much longer distances are coming in from 60-100 miles away.
Serving the Quad Cities community, including Davenport and Bettendorf, Iowa, the Commission operates a multifaceted facility, including its recycling center, e-waste center, MRF and landfill. The Commission is also the local KAB affiliate and leads community-wide education efforts about recycling.
Waste Commission Director Kathy Morris says, “We’ve very pleased with the program results so far. Davenport and Bettendorf are recycling more, and we’re able to serve additional communities.”
Key Insight 1: Best Practices in Education Campaign Effectiveness.
The Commission invested in a robust education and promotion plan for the launch and rollout of the new recycling program. They used data from a public perception survey to inform messaging and outlets, and made strategic use of funding and ambassadors in the community to get the message out. The community-wide, multi-platform campaign was informed by resources and tools from The Recycling Partnership, a national nonprofit, and executed by a local PR firm. Since the initial launch, the Commission has dedicated attention to follow-through to ensure education efforts have long-lasting effects.
Key Insight 2: Making the Decision to Continue MRF operations.
When the Scott Area Recycling Center’s aging recycling equipment needed to be replaced, the Waste Commission of Scott County and its intergovernmental partners, the cities of Davenport and Bettendorf, pursued the change from dual to single stream recycling by evaluating three options – own and operate the MRF, send materials to a privately-owned MRF, or outsource operations to a private entity. Bucking the trend among municipality-owned MRFs today, this analysis concluded that the best option was for the Commission to own and operate an upgraded Recycling Center, and at the same time increase inbound volumes by marketing to more nearby municipalities.
The Closed Loop Fund case study includes insight tools to help others adopt Scott County’s best practice.
The case study also highlights other key success factors for Scott County that can help others implement a successful program:
For more case studies or to learn how to apply for funding, visit www.closedlooppartners.com.
About Closed Loop Fund
Founded in 2014, Closed Loop Fund is a social impact investment fund that provides cities access to the capital required to build comprehensive recycling programs. Closed Loop Fund aims to invest $100 million by 2020 with the goal to create economic value for cities by increasing recycling rates in communities across America. Closed Loop Fund brings together the world’s largest consumer product, retail, and financial companies committed to finding a national solution to divert waste from landfills into the recycling stream in order to be used in the manufacturing supply chain. Key supporters include 3M, Coca-Cola, Colgate-Palmolive, Dr. Pepper Snapple Group, Goldman Sachs, Johnson & Johnson Family of Consumer Companies, Keurig Green Mountain, PepsiCo and the PepsiCo Foundation, Procter & Gamble, Unilever and the Walmart Foundation. For more information, visit www.closedlooppartners.com
Press Release – NEW YORK / 5 April 2017 – The Ford Foundation today announced it is committing up to $1 billion from its $12 billion endowment over the next 10 years to the nascent investment field known as mission-related investing.
The commitment is one of the largest ever made to MRIs, and the largest by a private foundation. The move sends a signal to other foundation and institutional investors that perhaps the time has come to consider the potential of impact investing.
Using a deliberate and phased approach, the foundation will gradually carve out funds from its existing investment portfolio and deploy them over time into funds seeking to earn not only attractive financial returns but concrete social returns as well. Initial investments will focus on areas where the foundation has deep prior experience and sees both significant investment opportunity and significant alignment with its mission to reduce poverty and injustice. Two initial areas of focus are affordable housing in the United States and access to financial services in emerging markets.
“We are making this commitment because we believe MRIs have the potential to become the next great innovation for advancing social good,” said Darren Walker, president of the Ford Foundation. “We need to expand our imaginations and our tools if we want to tackle the large-scale problems facing the world today. We can’t neglect the tremendous power of markets, including the capital markets, to contribute—and with today’s announcement, we are putting a significant amount of our money where our mission is.”
A History of Impact
The Ford Foundation makes between $500 million and $600 million in grants each year. Walker said the careful and gradual move of some endowment resources to MRIs would have little to no impact on its grant making budget—which by law must be at least 5 percent of endowment values.
Over the years, the Ford Foundation’s grants—drawn entirely from returns on its endowment—have helped improve hundreds of millions of lives through social sector innovations such as the Green Revolution, microfinance, public-private partnerships in cities, legal aid, the creation of public broadcasting and Sesame Street, as well as support for history-changing movements such as the civil rights and women’s movements in the U.S, the fight against apartheid in South Africa, and the protection of human rights dissidents and defenders in Latin America in the 1970s and in the Soviet Union in the 1980s—among many other achievements.
The foundation also pioneered, in 1968, the field known as “program-related investments”—a programmatic tool that allowed foundations to offer not only grants but also low interest loans and equity investments to catalyze social impact in market-related arenas such as urban development, homeownership, microfinance, certification models to guide responsible consumer choices, and other fields. The foundation’s success in managing more than $650 million in PRIs over the years encouraged it to consider the next step: mission-related investments directly from its endowment.
Unlike PRIs, MRIs are made from a foundation’s endowment. MRIs take into consideration the foundation’s mission as part of meeting prudent investment standards about risk and expected return. The intent is to make financial returns with PRIs as well, but under IRS guidelines, PRIs must meet a charitable standard rather than the more demanding rules that aim to discourage jeopardizing investment.
Catalyzing a Movement
Xavier de Souza Briggs, vice president for the foundation’s Economic Opportunity and Markets program, will be responsible for overseeing a team of investment professionals dedicated to managing the MRIs. He said capital will be allocated to impact funds, not to individual companies.
“No matter the investment, our choices will be an extension of our history of seeking the most innovative ways to promote a more inclusive economy,” said Mr. Briggs. “We are applying what we have learned from PRIs to inform the way we approach mission-related investing. The result, we hope, is to expand and diversify the market for MRIs so that it becomes easier for other institutional investors to invest in ways that consider social impact.”
The Ford Foundation follows in the footsteps of peer organizations that have helped to pioneer the movement of directing endowment assets to impact investments. The evolution of impact investing, including measurement frameworks and the growth of impact-oriented funds, have made this step much easier for the foundation to make and for others to consider. As the foundation launches its mission-related investing, one key objective is to promote diversity, equity, and inclusion within the investment movement, paying attention to the makeup of investment teams, as well as where they invest, and with what values.
“My conviction is that this moment offers us an opportunity to be accelerators of justice. And my hope is that, before long, many more foundations will find ways to tap into the power of their own endowments,” said Mr. Walker.
The foundation said it would make results and learnings from its MRI program transparent in order to help the marketplace advance and mature. As part of that larger goal, the foundation will continue to make programmatic grants that enrich the evidence base and market standards for impact investing.
To learn more about the Ford Foundation’s commitment to mission-related investing, click here to view Mr. Walker’s letter titled “Unleashing the Power of Endowments: The Next Great Challenge for Philanthropy.”
How Mission-Related Investments Work: https://www.youtube.com/watch?v=qOcBoNjZ_Us
About the Ford Foundation
The Ford Foundation is an independent, nonprofit grant-making organization. For more than 80 years it has worked with courageous people on the frontlines of social change worldwide, guided by its mission to strengthen democratic values, reduce poverty and injustice, promote international cooperation, and advance human achievement. With headquarters in New York, the foundation has offices in Latin America, Africa, the Middle East, and Asia.
Founded in 1936 by Edsel Ford, the foundation became the world’s largest philanthropy in the late 1940s with the bequests of Edsel and Henry Ford. Guided by Henry Ford II to become an independent institution with a global mission of advancing human welfare, the foundation has through the years made more than $45 billion in grants and improved hundreds of millions of lives.
Press Release – Singapore — March 28th, 2017 — Durreen Shahnaz, Founder of Singapore-based Impact Enterprise IIX (Impact Investment Exchange) and the IIX Foundation, was selected as a 2017 Business for Peace Award Honoree for her commitment to promoting an evolved form of capitalism that values both financial returns and positive social and environmental impact. IIX, through its work over the last eight years, has effectively created a social capital market in Asia, connecting investment to development and unlocking millions of dollars for high-impact enterprises, resulting in impacting over eight million lives.
Durreen Shahnaz is no stranger to redefining the status quo. She was the first Bangladeshi woman to work on Wall Street and to graduate from the renowned Wharton School of Business. Shahnaz’s first entrepreneurial venture was in 1999 when she began an e-commerce company that connected rural artisans worldwide to an online global marketplace with oneNest. After growing and selling oneNest, she continued her pursuit of sustainable growth and equitable markets by founding IIX, the Impact Investment Exchange, and creating not only the world’s first social stock exchange but also a global ecosystem and various innovative financial structures and capital-raising platforms to support the growth of impact investing. Under Shahnaz’s leadership, IIX continues to be a pioneering force and leader in the impact investing space that pushes the boundaries of innovation when it comes to involving players from the private, public, and philanthropic sectors in solving today’s most pressing issues.
Shahnaz explains, “If we are going to achieve an equitable and peaceful society, it is imperative for us to have a financial system that is inclusive and works for all. Thus, crazy as it may have been, I committed myself eight years ago to revolutionizing capital markets to promote equal and sustainable growth worldwide. It was a ‘quixotic dream’ equivalent to boiling the ocean of financial change. Well, that quixotic dream is a reality now and that ocean is lukewarm, so we are definitely getting there!”
The 2017 Oslo Business for Peace Award highlights exceptional individuals who are able to ethically create economic value while generating value for society. Recipients are selected by a committee of Nobel Prize winners and past award recipients include Sir Richard Branson of Virgin (2014), Ratan Tata of Tata Group (2010), Mo Ibrahim of Mo Ibrahim Foundation (2009), and Paul Polman of Unilever (2015). This year, the four honorees, including Durreen Shahnaz, will be presented to the public and the media at an Award Ceremony on Tuesday 16 May, 2017 in Oslo City Hall, the same location as that of the Nobel Peace Prize ceremony.
“Impact Investing has been growing rapidly in recent years and I am honored to be recognized as an innovator at the forefront of this movement. I view this award as a celebration of both the progress we have made to date as well as an encouragement to continue to dedicate myself and IIX to this mission and impact 100 million lives by 2020 by changing finance and financing change for social and environmental good.” Shahnaz shares.
IIX is a Singapore-based impact enterprise that bridges the gap between finance and development, carving out third space for global social and environmental solutions by unlocking investment capital. As a pioneer of impact investing, IIX builds pathways to connect the Wall Streets of the world with the backstreets of underserved communities. IIX platforms and innovative financial products enable impact enterprises to accelerate their business and positive impact, while pushing the impact investing space from the margins to the mainstream. To date, the work of IIX has spanned 20 countries and continues to expand with the mission of improving 100 million lives by 2020.
About IIX Foundation
IIX Foundation focuses primarily on the program management of grant-funded projects. With IIX Foundation’s flagship program IIX ACTS, the foundation supports early and growth stage social enterprises to raise capital so that they can thrive, grow, and impact more lives. In addition, IIX Foundation creates opportunities for blended capital to leverage philanthropy funding to unlock investment capital.