What’s New In Impact Investing? June Roundup

Patrick DugganImpact Investing, InSight

pacific community ventures small business impact investing

Impact investing is about using markets and money for social good. Impact investing is built on the belief that private capital can play a powerful role in solving the massive global challenges of our day, and that capital markets should work for good as well as profit. This vision is realized through investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.

Every month, PCV will give you a roundup of what’s new in the field, what conversations are taking place, and how you can get involved. Here are some highlights from June:

The Social and Economic Impacts of Investing In California’s Underserved Communities

Lack of access to fresh, healthy food is a pressing issue for the 18 million Americans who live in food deserts. In California alone, nearly 1 million residents, 45 percent of whom are low-income, live in areas without supermarkets or large grocery stores nearby. The California FreshWorks program provides loans and grants to grocery stores, farmers’ markets, and other food retailers that offer nutritious, affordable food options in communities where such options are scarce. In order to better understand the program’s impact, PCV InSight consulted with the California Endowment on its first-ever third-party evaluation of the program. FreshWorks’ investments have produced significant social impact, increasing access to fresh food for over 800,000 people. Read the full report >

FreshWorks isn’t the only major program that’s creating good jobs and economic opportunity around California. PCV also just released our eleventh annual report examining CalPERS’ California Initiative, a $1 billion private equity, economically targeted investment (ETI). The California Initiative invests in companies located in traditionally underserved markets that have historically limited access to institutional equity capital, employ workers who reside in economically disadvantaged areas, and provide employment opportunities to women and minority entrepreneurs. Read the report >

Getting Started With Impact Investing

Established programs like FreshWorks or CalPERS’ California Initiative have a history of creating social impact while also demonstrating a financial return. But what if you’re just getting started in the field? Our friends at ImpactAlpha have you covered. Their new series, done in partnership with TheImpact, has seven steps for dipping your toe in the social impact water. They also delve into early-stage impact investing, public equity investing, fixed-income impact investing, and global trends around real assets. Check out the entire Impact Primer >

Impact investing is becoming increasingly popular and assets under management are growing. But actually doing impact investment deals is still hand-tooled, complicated, and expensive. Impact investment transactions face issues beyond the scope of most financial agreements, including mission protection, impact measurement, and alternative exit paths. Two new projects are aiming to equip impact investment dealmakers with legal language and templates to forestall confusion and conflict down the road. Read more >

Confronting the Myths of Impact Investing

In the U.S. and around the world, we’ve seen private capital unleashed with a focus on impact across sectors, geographies, and asset classes. Jean Case – CEO of the Case Foundation — is encouraged by the good news, highlighting growth in the number of successful social enterprises. But even as we’re celebrating the major milestones achieved in impact investing, it’s important to remember that these are still early days we have to pay attention to the critiques from skeptics. In this Medium post, Jean reviews the myths and skeptical perceptions she’s hearing. Read more >

Lately, of course, there’s been an explosion of interest in impact investing, with the traditional foundation model coming under growing challenge. The Heron Foundation is far ahead of nearly any other foundation in embracing these new approaches, and has now shifted the majority of its assets into mission-related investments. Heron’s CEO Clara Miller sees this shift as bringing Heron more into the economic mainstream and escaping the marginalization that is common for foundations. Today, as a result of its investing changes, Heron has the capital to have a far bigger impact on America’s economic life to advance its mission than it previously did. Read more >

How Impact Investing Can Help Social Mobility And Revive The American Dream

Over the last 30 years, the American Dream has drifted further out of reach for lower income individuals and families. Among the factors that contribute to this discouraging picture: failing school systems, mass incarceration in communities of color, and the inability of employers to create good jobs. A team at The Bridgespan Group recently conducted research that highlights the critical role of philanthropy in reviving the American Dream, and identified $1 billion investments that could spark upward mobility for people trapped at the bottom. Read their proposals >

More than 70% of Americans born in poverty are expected to remain there. There is no quick fix for this, but there are new approaches that could address its various manifestations. Social impact bonds and pay for success investing allows governments to fund evidence-based social programs that improve outcomes for vulnerable people—and keep their money if the program doesn’t work as planned. Like all impact investing, the strategy depends on effective collaboration. A recent successful project made possible by cross-sector collaboration with the Clinton Global Initiative, Urban Institute, and Kresge Foundation occurred in Denver. Read the results >