What We Learned Investing $500 Million
By Jeff Johns & Aimee Minnich, Impact Foundation Co-founders
We started building Impact Foundation in 2015 because we believed a growing number of people wanted the freedom and flexibility not only to grant their charitable funds but also to make a difference by investing. The concept was right on, but the processes were complex and challenging. So, we established a new foundation to create a simplified pathway for Donor/Investors.
In the last few months, we hit a milestone: investing $500M of charitable capital in companies aiming to create economic, social, and spiritual transformation within their organizations and communities.
As Mark Twain said: “All you need in this life is ignorance and confidence; then success is sure.” The past 8 years have been full of learning: some lessons came easily, others were hard-earned. Allow us to share a few with you.
Lesson One. Business can accomplish things charity alone cannot.
God designed His economy to run on the fuel of our generosity, and yet, charity alone cannot solve the world’s toughest issues. A study of the GDP growth in sub-Saharan Africa compared with the amount of international aid given to the same places shows an inverse relationship between aid and economic growth. In other words, the more aid given, the slower the economy grows.
Charity or government aid is a critically important component of emergency response to crises, such as genocide, famine, war, and mass displacement. The question becomes at what point should the focus appropriately shift from aid and emergency relief to investment and economic development. For long-term flourishing, a job is more valuable than a handout.
In addition to preventing or alleviating poverty, businesses built to honor God and love their neighbor have the ability to influence all spheres of society for good. Scripture gives us a definition of the role of business and also paints a picture of how the work is to be carried out: Business is meant to work with God (the means) to bring about his purposes in the world (the ends).
Lesson Two. Adding investments to a grant portfolio is not so daunting…if you have the right team.
Grants are often “one and done” and don’t require ongoing care and feeding. On the other hand, an investment means tracking returns, filing taxes, and voting shares. Managing 500 investments could feel like owning 500 cats in a small apartment. That’s why we are purpose-built for investing charitable capital in redemptive enterprises. The IRS has granted us tax-exempt status specifically to focus on investing for impact. Plus, our focused investment process allows us to move quickly and navigate this complex space. We take the workload, so all you need to do is grant to us and recommend an investment. Then, we manage everything and return proceeds to your favorite donor advised fund.
One of our most prolific investors recently shared with us what he’s observed over the course of deploying millions into more than 20 companies. He says that the main benefit to him of making investments rather than just granting is the continued engagement with the companies. As Matthew 6:21 illustrates, when he has “treasure” with a company, he sticks closer to the leadership team and the overall work of the organization. For him, that’s a real benefit in feeling a part of the good work being accomplished.
Lesson Three. Healthy Things Grow, and Growth Belongs to God.
We asked our team to share what they’ve learned on the way to $500M. Bill Davis, our Director of Digital Strategy, shared these thoughts.
“I think perhaps a key learning is from 1 Corinthians 3:6-7: ‘I planted, Apollos watered, but God gave the growth. So neither he who plants nor he who waters is anything, but only God who gives the growth.’
I have observed that Impact Foundation has focused not only on our core value of praying faithfully and expectantly but also on working faithfully and expectantly. We pursue the same due diligence and expectation on every deal. We have built and refined a process and follow it with the expectation that impact isn't necessarily in the size of dollars but truly whatever God will choose to do in the work being funded. It's not ours to force or manipulate. It is ours, however, to come alongside, to question, and especially to encourage and pray for. I.e., to help plant and help water. But it is God's to give the increase.
This open-handed expectation and faithful serving gives a chance for all the increase to shine as God-given and thus for Him to get all the glory. So, be faithful and eagerly expect God to work, but make no assumption about where He will increase.
If it follows a process, whatever God chooses is not ours to force or manipulate—it’s God’s to give the increase.”
Lesson Four. Successful investments depend on a healthy entrepreneurial ecosystem.
When we plotted our investments on a map, we began to see patterns. We’ve invested in dozens of companies in multiple African nations. Many of those companies have repaid their loans, and some have had successful exits. In contrast, we have sent very little investment capital to Central and South America. Why? It’s a complicated issue, but the answer may have something to do with a trend we see across the continent of Africa that seems to be missing in a lot of Latin America: training and support programs for faith-driven entrepreneurs.
Groups like Sinapis provide training, support and community in a dozen African nations. They come alongside entrepreneurs at critical inflection points to help in ways an investor alone cannot. Companies need more than just money to start, scale, and successfully exit.
Lesson Five. Prayer Matters and God Shows Up.
We’ve seen God answer prayers, large and small. What started as a covid-lockdown time-filler has become a daily practice; our entire team prays together at 9:30 CST. An early mentor encouraged us to write down our prayers and how we see God responding, and we have. The consistent act of interceding and listening, watching for God’s response, has taught us so much. Suzanne Chrisman, our Prayer Coordinator, shared these thoughts.
“I think we have learned collectively, as an organization, a greater trust in God. We have experienced Him as Provider on our way toward the $500M. He ultimately determined the deals that came to us and the timing of the deals. There was an element of surprise all along the way that reassured us He was in control. We learned when we ask for help, He will give it to us. This is evident in the new team members He brought to Impact Foundation at just the right time on the way to $500M. We experienced Him as Protector, being fully aware of an adversary that wants to steal and stop the good happening in the world. We are constantly learning the need to depend on Him for day-to-day grace. We are learning to ask freely and big, trusting Him with the results.”
Lesson Six. We’re just getting started!
Nine years into this work, it’s clear this is just the beginning. Our vision is straightforward: a world where everyone on the planet has access to a good job and the Good News. Simple to say, but executing the vision will take decades and the input of millions of Christians living out God’s call to faithful stewardship and true generosity.
God is moving in many different sectors to inspire entrepreneurs to use their ideas, their businesses, and their profits to help make the world a better place. As the discussion of capitalism's power and potential ills are everywhere, the world needs people living out a Biblical view of being fruitful and multiplying coupled with generosity and humility. Our work at Impact Foundation provides the funding for stories to unify wealth creation with abundant generosity, where many benefit.
