There’s almost nothing we’ve been prouder of over the last 20 years than our ability as an organization to create partnerships and build coalitions. In 2015 we turned our eyes to some of the biggest holders of untapped impact capital in America: pension funds. In order to make the case to both fund managers and the policymakers that put their rules in place, we joined forces with Harvard University and Enterprise Community Partners to form the Accelerating Impact Investing Initiative (AI3).
The AI3 is building a coalition of individuals from across sectors – investors, government agencies and philanthropic organizations – to develop a policy framework that supports impact investing in the United States, from conception to implementation. The AI3 will produce a policy platform that enables policymakers to more effectively set laws and regulations that foster impact investing, as well as direct new streams of capital to the field.
We saw early success with that movement, as the U.S. Department of Labor, which oversees the fiduciary rules for many U.S. pension funds, issued new regulatory guidance that is expected to open the door to more Economically-Targeted Investments from pension funds in the years to come. Our research shows that, when pursued carefully, ETIs have the potential to unleash a significant amount of new private investment into low- and moderate-income communities while fulfilling the fund manager’s fiduciary duty to pension holders and beneficiaries. For example, we estimate that if just 2 percent of the assets in the country’s public pensions and 1 percent of the assets in private pensions were dedicated to ETIs, it would bring $250-300 billion in private capital to the impact investing marketplace.