Impact investing is about using markets and money for social good. Impact investing is built on the belief that financial tools and 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 March:
[custom_headline type=”left” level=”h3″ looks_like=”h4″]Big Things From Our Friends At The GIIN[/custom_headline]
As the field of impact investing grows, there’s increased demand for greater transparency on the impact performance of investments. Since 2009, the Global Impact Investing Network (GIIN) has supported investors in their measurement efforts through IRIS, a publicly available catalog of standardized metrics that impact investors can use to measure the social and environmental impact of their investments. Last month, the GIIN launched IRIS 4.0, an updated version of the catalog. IRIS 4.0 is the result of a two-year process during which the GIIN solicited feedback from IRIS users and measurement experts – like PCV InSight—on how the IRIS catalog could better meet the needs of its users. Read more >
We’re looking forward to seeing how IRIS 4.0 will shape impact measurement and support investors in effectively and efficiently communicating the impact of their capital.
In addition to launching IRIS 4.0 last month, the GIIN also hosted a webinar on the public messaging and narratives that surround impact investing. Omidyar Network, together with the Ford Foundation, MacArthur Foundation, and the Global Social Impact Investment Steering Group, commissioned Monitor 360 to explore how impact investing is currently discussed in traditional and social media. This groundbreaking research provided key insights to communicating more effectively about impact investing, to broaden its appeal and move people from awareness to action. Read more >
[custom_headline type=”left” level=”h3″ looks_like=”h4″]CDFIs Are At A Crossroads[/custom_headline]
Every disruptive industry eventually faces a moment that can pivot it to new levels and greater impact. Today, the CDFI industry is at such a crossroads. For more than 30 years, CDFIs have helped to rebuild American communities, weathering a proof of concept period in the 70s and 80s and a steady growth period in the 90s before outperforming banks during the 00’s. But what about tomorrow? Using quantitative and qualitative research, our friends at OFN have just released CDFI Futures: An Industry at a Crossroads. It discusses this inflection point for community investment and its future challenges and opportunities. Read more >
[custom_headline type=”left” level=”h3″ looks_like=”h4″]A Sea Change In Making Impact Investments Permanent[/custom_headline]
Impact investing started off with venture-capital style private equity funds that generally have to be liquidated after 10 years. But now, firms are looking towards something new and exciting for our growing movement: permanently capitalized holding companies with long-term ownership stakes in operating companies that deliver real benefits such as food security, clean water, and climate mitigation. ImpactAlpha looks at investment companies that are tapping institutional investor interest in investor-operator models for long-term sustainable real assets. Read more >
While impact investing continues to gain momentum in the U.S. and abroad, scaling it has proven difficult. The fact that momentum has not translated into institutional capital reaching critical mass is not surprising. Why? Because at the most basic level, impact investing is challenging the building blocks of capitalism and its profit motive as the sole path to maximizing shareholder value. The Beeck Center for Social Impact and Innovation tackles this problem. Read more >
[custom_headline type=”left” level=”h3″ looks_like=”h4″]How The Next Generation Of Business Leaders See Philanthropy[/custom_headline]
Andrew Carnegie’s advice in the essay “Wealth” was to spend the first part of your life getting as much education as possible, to spend the second part making all the money you could, and to spend the last part giving it all away for worthwhile causes. Writing in the Harvard Business Review, our partners at Omidyar Network take a look at how business leaders today are not only trying to address community and global problems earlier in their lives; they are also questioning the traditional divide between commerce and philanthropy. Read more >
[custom_headline type=”left” level=”h3″ looks_like=”h4″]Social Enterprises Tap Both VCs and Foundations[/custom_headline]
Increasing numbers of foundations are investing in education technology, but by avoiding equity investing years ago, foundations were missing a significant opportunity to do social good. Many of these foundations have now begun experimenting with making impact investments in private companies that align with their mission, either through program-related investments (PRIs) that are expected to earn below-market rates of return or mission-related investments (MRIs) that are expected to achieve both positive social impact and market-rate returns. Read more >
[custom_headline type=”left” level=”h3″ looks_like=”h4″]Impact Evaluation: How the Wonkiest Subject in the World Got Traction[/custom_headline]
In the early 2000s, organizations like the Center for Global Development decided to tackle a long-standing problem in the social sector: there were too few quality impact evaluations being conducted to ascertain whether development projects were really, truly, achieving their goals. By raising the question of why more impact evaluations were not being conducted – why so few development programs even had baseline data – they shook up established interests and paved the way for a new way of approaching social impact work. Read more >