From officially being coined as a term in 2006 to being named as Forbes' top trend in philanthropy for 2015 and 2016, impact investing is enjoying rapid growth. Philanthropy is changing quickly with donors increasingly looking to invest charitable capital in companies and charities that pursue impact alongside financial profit. Even Bain Capital recently announced an impact investing fund.
With so many organizations in on the action, it can create confusion for those just venturing into the conversation. This blog attempts to explain the landscape and offer a survey of many of the organizations involved in impact investing (not an exhaustive list, but a start).
Enterprises engaged in impact investing fall into four broad categories:
- Foundation Investors - Using non-profit, tax exempt money, foundations invest in enterprises whose mission aligns with their own.
- Institutional Investors - "Leading pension funds, insurance companies, foundations, and asset managers across Europe and North America are pushing the responsible investment envelope" notes a recent article in the Stanford Social Innovation Review.
- Private equity/venture capital Investors - A 2016 Global Impact Investing Network survey found that investors plan to increase the capital committed to impact investments in 2016 to $17.7 billion, a 16% increase from commitments in 2015.
- Information/Advocacy Providers - As in any burgeoning industry, advocates have jumped in to provide information critical to the growth of impact investing.
Below is a long, but not necessarily comprehensive, list of organizations working in these spaces. The descriptions have been mainly taken from the websites of the organizations themselves. We welcome feedback if any of these descriptions or categorizations seems off.
Impact Foundation - My personal favorite, Impact Foundation offers a donor advised fund with a streamlined solution for investing charitable capital in enterprises that do good and make money. Founded earlier this year, we've reached $20m in assets invested for impact and financial return.
Acumen - is changing the way the world tackles poverty by investing in companies, leaders and ideas. We invest patient capital in businesses whose products and services are enabling the poor to transform their lives. Founded by Jacqueline Novogratz in 2001, Acumen has invested more than $97 million in 90 companies across Africa, Latin America, South Asia and the United States. We are also developing a global community of emerging leaders with the knowledge, skills and determination to create a more inclusive world.
Christian Super - is a not-for-profit pension fund based in Sydney, Australia. Operating since 1984 and with a strong non-denominational Christian focus, the pension fund serves over 25,000 members from over 2,000 ministry organizations across Australia, managing USD 750 million in retirement savings. It offers members a choice of five ethical portfolios with differing risk and return profiles across asset classes.
Impact Assets - Like Impact Foundation (without the faith emphasis), ImpactAssets provides donor advised funds that allow people to invest charitable capital for good. ImpactAssets is a nonprofit financial services firm that increases the flow of capital into investments that deliver financial, social and environmental returns.
RSF Social Finance - RSF Social Finance (RSF) is a pioneering non-profit financial services organization dedicated to transforming the way the world works with money. In partnership with a community of investors and donors, RSF provides capital to non-profit and for-profit social enterprises addressing key issues in the areas of Food & Agriculture, Education & the Arts, and Ecological Stewardship.
New Profit - Focus on helping scale organizations, shift public policy, and build communities of learning and action. Series of funds focused on specific impact areas.
Omidyar Network - (both an LLC and nonprofit) structured to support the notion that philanthropy is more than a type of funding. In its truest sense, philanthropy is about improving the lives of others, independent of the mechanism. Long time heavy weight in impact investing.
Goldman Sachs Urban Investment Group - the group deploys the firm's capital by making investments and loans that benefit urban communities. Through its comprehensive community development platform, UIG is a catalyst in the revitalization of underserved neighborhoods. UIG has committed over $4.7 billion, facilitating the creation and preservation of over 20,000 housing units - the majority of which are affordable to low, moderate and middle-income families - as well as over 1,900,000 square feet of community facility space and over 6,000,000 square feet of commercial, retail, and industrial space.
JP Morgan - Social Finance business launched in 2007 to serve the growing market for impact investments in direct response to client interest and the increasing recognition that innovative business models can complement limited public sector and philanthropic resources by delivering market-based solutions to achieve sustainable and scalable social and environmental impact. The group publishes research to provide thought leadership to the market, commits J.P. Morgan capital to impact investments, and provides investment services to its clients.
Citi Foundation - Citigroup is a global financial services company that does business in more than 140 countries and has approximately 200 million customer accounts. The New York-based Citi Foundation is committed to individual and family economic empowerment, and targets its strategic giving across four priority focus areas: microfinance and microenterprise, small and growing businesses, education, and financial education and asset building.
Credit Suisse - Credit Suisse engages in impact investing across three areas of operations: (1) a dedicated business line which structures, manages and offers impact investing products to retail, high-net-worth, and institutional clients; (2) in-house research which publishes reports on industry developments and impact sector trends; (3) capacity building grants through the Credit Suisse Foundation which strengthen the impact investing industry, its institutions, and their management.
Deutsche Bank Deutsche Bank’s impact investing activities are concentrated in community development and microfinance, and are carried out by the bank’s New York City-based Community Development Finance Group. Over the last 16 years, Deutsche Bank has placed over USD 2 billion of social capital, recognizing less than USD 11 million in write-offs. In the U.S., Deutsche Bank has invested more than USD 1.2 billion in community development, which includes affordable housing, green real estate, new business development, and support services.
Enclude - Enclude, formerly doing business as ShoreBank International and Triodos Facet, is a global advisory services firm dedicated to building an inclusive and prosperous global economy through integrated capacity and capital services. Enclude’s Capacity Solutions business assists financial institutions and public and private sector organisations in improving their profitability and effectiveness to better meet the needs of the un(der)served by designing, connecting, financing, and building inclusive financial products and services.
FMO - Founded in 1970, FMO is the Dutch development bank. FMO supports sustainable private sector growth in developing markets by investing in ambitious entrepreneurs. It believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO specializes in sectors where its contribution can have the highest long-term impact: financial institutions, energy, and agribusiness, food, and water.
Private Equity/Venture Capital Investors
Sovereign's Capital - Focused on heatlthcare, IT and consumer products & services, Sovereign's invests in early-stage growth companies whose founders approach their work with strong business discipline and a faith perspective. http://sovereignscapital.com/
Schulze Global - A private investment firm focused on the world’s most dynamic frontier markets, Schulze Global approaches each investment with the goal to improve economic, social, and governance outcomes for the community where they invest. http://schulzeglobal.com/
Abraaj Group - Founded in 2002, The Abraaj Group is a leading private equity investor operating in the growth markets of Asia, the Middle East and North Africa (MENA), Turkey and Central Asia, Sub-Saharan Africa, and Latin America. The Abraaj Group currently manages USD 7.5 billion across 25 sector and country-specific private equity funds and yield-generating real estate investments. Through its stakeholder engagement program, the Group has supported best-in-class organizations focused on entrepreneurship, job creation, healthcare, education, and community engagement.
Global Environment Fund GEF’s investment programs span three asset classes: Private Equity (growth capital), Real Assets (sustainable timberlands) and Infrastructure (energy generation, environmental control, urban environment and transportation).
Bridges Ventures - Investment focus on sustainable growth funds, property funds, and social sector funds.
Pacific Community Ventures Pacific Community Ventures engages small businesses, impact investors, and policymakers to build an economy that works for everyone. We do this by empowering small business owners with working capital, free advice and mentorship, and access to the networks they need to grow their companies.
Root Capital Root Capital is an agricultural impact investor that grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America by lending capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses. Different Impact Dashboard Metrics - https://www.rootcapital.org/our-impact/dashboard
LGT Venture Philanthropy - Established in 2007, LGT Venture Philanthropy (LGT VP) is a global impact investor supporting organizations with outstanding social and environmental impact. Headquartered in Zurich with local teams in Latin America, Africa, Europe, India, Southeast Asia, and China, LGT VP is committed to improving the quality of life of less advantaged people in developing and emerging countries, specifically in the areas of education, health and sanitation, agriculture and forestry, renewable energy, and information and communications technologies (ICT).
Bain Capital - Yep, that Bain Capital. They announced an impact investing fund earlier this year. Read more -->
Apollo Global Management - Working with the Private Equity Growth Capital Counsel (PEGCC) in 2009, Blackstone helped craft a set of Guidelines for Responsible Investment that incorporate environmental, health, safety, labor, governance and social issues into investment decision-making and ownership activities. The firm performs an analysis of the relevant environmental, public health, safety and social issues and continues to monitor those issues during its period of engagement.
Gray Ghost Ventures - Gray Ghost Ventures (GGV) is an impact investment firm dedicated to providing market-based capital solutions to entrepreneurs who are addressing the needs of low-income communities in emerging markets. GGV's focus areas include microfinance, social venture investment, and affordable private schools.
GIIN - Since its inception in 2009, the GIIN has supported the development of and raised awareness for the emerging field of impact investing by building a strong network of investors and leaders.
IRIS - Metrics tool for GIIN and overall metrics leader.
Case Foundation - The Case Foundation supports the impact investing ecosystem and provides opportunities to educate and activate investors. In partnership with CASE at Duke, PCV Insight and Impact Assets, they've supported the launch of a new study, Impact Investing 2.0: Insight from 12 Outstanding Funds and have created a number of helpful resources on impact investing.
Rockefeller Foundation - The Rockefeller Foundation has a long history in supporting innovations that seek to catalyze private sector investment for social and environmental good. In 2007, the term “impact investing” was coined at The Rockefeller Foundation’s Bellagio Center, putting a name to investments made with the intention of generating both financial return and social and/or environmental impact. Since then, the Foundation has worked to build the infrastructure for the impact investing field to take hold. Among our work, we have supported the Global Impact Investing Network (GIIN), B Lab, and GIIRS.
Net Impact - Net Impact mobilizes the next generations to use their skills and careers to make a positive impact on the world. Mainly undergraduate and young professional groups learning about Impact in for-profit and non-profit settings.
World Economic Forum - https://www.weforum.org/projects/mainstreaming-sustainable-and-impact-investing/
Duke's Center for the Advancement of Social Entrepreneurship - Like many universities with degree programs or focuses on social innovation or impact investing.
Stanford Social Innovation Review - University program to create awareness and spread of ideas on social innovation.
Global Social Impact Investment Steering Group (successor to G* Social Impact Investment Taskforce) - Taskforce that takes top thought leaders from many nations and brings them together. http://www.socialimpactinvestment.org/
Social Finance US - Social Finance partners with governments, nonprofits, foundations, impact investors, and financial institutions to create innovative financing solutions to improve social outcomes. In the Pay for Success and Social Impact Bond market, our Advisory Services, Social Investment, and Active Performance Management teams support all phases of work, tailored to the needs of our partners.
Social Impact Bond Assistance Lab - Social impact bonds are a promising new approach to government financing of social service programs. By combining performance-based payments and market discipline, pay-for-success contracts using social impact bonds have the potential to improve results, overcome barriers to social innovation, and encourage investments in cost-saving preventive services. Established with support from the Rockefeller Foundation, the Harvard Kennedy School Social Impact Bond Technical Assistance Lab (SIB Lab) conducts research on how governments can foster social innovation and improve the results they obtain with their social spending. An important part of our research model involves providing pro bono technical assistance to state and local governments implementing pay-for-success contracts using social impact bonds.
Council of Foundations - The Council is participating in the conversation about unlocking new capital for social good. For decades, some foundations have made impact investments that intend to generate financial and social returns to complement grants, partnerships, advocacy, and other tools in the philanthropic toolbox. COF brings together Foundation leaders to have these conversations and also advocate for one another.
Impact Alpha - ImpactAlpha is redefining business media around social and environmental value, just as impact investing is redefining finance. Robust journalism and compelling media have been instrumental in the growth of other new financial markets, from venture capital to hedge funds to emerging markets investment. The growing impact marketplace needs dedicated journalists working the impact beat, telling the stories, framing the narratives, identifying the leaders and calling the trends.