Rethinking Risk/Reward as a Steward Investor
“Was Jesus’ work as a carpenter as valuable as His work in public ministry preaching and healing?”
That seemed to stump people I asked, until one day, a friend of mine responded, “Don’t you realize that everything Jesus did was simply in direct obedience to the Father? So when Jesus was working as a carpenter he would have been out of the Father’s will if he had chosen to go into public ministry too early.”
The Power of Investment Gleaning
Would loaning money to this company at less than market-rate interest be a bad investment? Many well-meaning investors are split on questions like this. Some argue that profit maximization is always the goal. More profit, more impact, right? And often that’s the line that secular impact investing keeps feeding us. A major study by the Global Impact Investing Network suggests there’s no trade-off between profit and impact.
Does that need to be our definition of success too?
LLC, S Corporation, L3C, Benefit Corporation?
Every profession has its hazards. For mine, it’s lawyer jokes and requests for free legal advice. This blog contains neither, but it will provide a little education on the basic options when forming a company so you’ll sound smart when you call your own counsel.
Should I start a business or a non-profit?
Anytime someone says, “I’m thinking of starting a nonprofit,” my immediate thought is to make sure I can’t talk them out of it.
As Dan Palotta points out in his semi-famous Ted Talk titled “The Way We Think about Charity is Dead Wrong”, charities/nonprofits face tremendous headwinds toward scalability. Palotta examined the number of organizations surpassing $50M in revenue since 1970, and found only 144 charities reached that level while 46,136 for-profit companies did.
How much Impact and Financial Return is Possible?
Without clarity, we can’t know what to expect when entering into impact investments; lack of clear expectations will almost always lead to disappointment.
That’s why we've developed a framework that can help make sense of the interplay between impact and financial return.
We have seen hundreds of companies tackling a wide range of issues through business models as diverse as bus seat manufacturing, hydroelectric power, software development, and a cattle feed lot. Likewise, the potential return for investors is equally varied.
SAFE or Convertible Note?
Should I offer investors a SAFE or a convertible note? What’s the difference and is one always better than the other?
Best Practices in Redemptive Methodology
REDEMPTIVE METHODOLOGY defined
An enterprise whose primary positive impact on the world happens through the way business is conducted. Its leadership, being rooted in Christ, follows the Spirit with intentionality for how they can participate in God's transformational work in the lives of employees, vendors, & customers while creating sustainable value. Read more and discover best practices.
Ethiopia: Understanding the Verdant Model
The Verdant leadership team has spent a great deal of time putting together their framework for how they cultivate new opportunities. Starting with small explorations, they then perform a standard set of rigorous tests before committing in a significant way.
Having spent a week with the team on the ground as an outside observer, we noted there are three key drivers of success…
Ethiopia: What Does it Take to Find Success?
As a previous post discussed, aid isn't enough to sustainably overcome poverty. What we need is large-scale efforts: from far-reaching Microfinance to big businesses. This blog focuses on the Verdant Frontiers family of companies—Verde Beef, Verdant Consulting, and Verdant Ventures—and their efforts to reach scale in extreme conditions.
So far, Verdant Frontiers is generating more than 12,000 ongoing, long-term incomes in the local community. Having a positive impact with this kind of scale takes dedication, business excellence, and God’s merciful provision.
Ethiopia: Jobs, Not Aid, Is the Most Urgent Need
“Jobs, not aid, are the most urgent need of these starving people,” I thought. We crouched on the dirt floor of a twelve-foot diameter grass hut in the Omo River Valley of Southern Ethiopia. Twenty-one hours away from the capital city live the Kara, Hammar, and Benna tribes—people who use cell phones to communicate but whose ways are otherwise unchanged from those of their ancestors who settled the region thousands of years ago. Picture the most remote tribal images you have seen in a National Geographicmagazine, and you are likely thinking of these people groups.
Three Trends in Impact Investing for 2018
Impact Foundation exists to invest charitable capital for economic, social, and spiritual transformation, our version of impact investing. It's the next iteration of philanthropy because innovative foundations and givers have recognized that all enterprises, not just charities, can produce both social and financial results on a spectrum from positive to negative. While we whole-heartedly believe impact investing is here for the long run, not everyone lives every day in this world. That's why we bring you this summary of the most important conversations in impact investing.
PS Kitchen in the News
Check out some of the great press on our favorite NYC restaurant, PS Kitchen.
We're so grateful to have been a part of this incredible project from the early days. NBC New York was so taken by the story of hope and empowerment (not to mention super yummy vegan dishes) they spotlighted PS Kitchen.
And here's yet another spotlight of PS Kitchen from Redeemer NYC.
Our visions of work and business are anemic
Increasingly, Christians have come to hope, and perhaps even expect, there is more to the idea of Kingdom impact through business. The faith at work conversation has made much progress in the past decade to remind us of the theological importance of our day-to-day work. Through the efforts of countless authors, parachurch ministries, and pastors, we've been taught that work provides an opportunity for living the gospel and witnessing to our neighbors….
Why invest in “redemptive business”
Expanding on traditional Evangelism/Discipleship, the idea of Redemptive Methodology borrows heavily from Praxis Labs’ concept of a “redemptive entrepreneur”, or one who seeks to embody the gospel in creating and building a venture that leaves a meaningful impact on the world.
Businesses built by these kinds of entrepreneurs may engage in “evangelism” as traditionally defined – explaining the pathway to eternal salvation. And they go beyond that to live out the Gospel through the products and services they provide and the way they conduct business.
What Will I Leave Behind?
I was 17 when my dad died. It was sudden and deeply disorienting. Those days and weeks immediately afterward were a dense fog of grief and cleanup. He died without a will or estate plan (mainly because he had nothing to plan).
As the youngest of 5 kids and the only one still living at home without an adult job, I received the largest "inheritance". After paying all the bills, my dad’s “estate” consisted of $3,000, a small plastic trash can full of change, and a few mementos. I got the entire checking account and the trashcan of change, which I used to feed the laundry machines in my freshman year of college.
Elevating a Country’s GDP: Laos Agriventures
Sitting between Thailand and Vietnam, the country of Laos is marked by rugged mountains and one of the lowest per capita incomes in the world. This poverty fuels two of the largest industries in the Golden Triangle (Laos, Myanmar, Thailand): opium trade and human trafficking.
Jobs and the hope of the Gospel - they're needed here perhaps more than anywhere else. Fortunately, the Lao government has been implementing reforms meriting attention from US investors.
Investing for a Triple Bottom Line with Craig and April Chapman
As we launched Impact Foundation, Jeff and I have searched for board members who share an excitement for kingdom impact investing and who have skills and experience to share. We found that and more in Craig and April Chapman. We asked the Chapmans to describe their experiences investing for impact. Here, in their own words, is there response.
Over the last few years, our paradigm about how best to provide financial support to organizations serving those in greatest need has been shaken up, if not blasted apart, by the notion of “impact investing.”
The Power of a Road
Winding along dirt roads South of San Pedro Sula for two hours gave us plenty of time to talk. As we drove, Pete pointed out the truck window at the rows of young coffee, yucca, and pineapple. "All those fields are new. The first time I came out here [on a five hour donkey ride] there was nothing in these hills. Can you guess why that changed?"
Drought ended? Drug cartels stopped fighting in the region? Some nonprofit moved in with an agriculture program?
No, no, and no.
Investment Criteria 3: Structure and Governance
If reviewing risk disclosures and considering the finer points of unrelated business income tax do not sound enjoyable to you, then take heart. You can rest easy knowing these are the kinds of things Impact Foundation vets for each investment and you don't have to.
What sorts of things constitute structure/governance?
In the third phase of our vetting, we look at the underlying documents, governance, and leadership of the organization to make sure the investment is structured well to achieve our financial and impact goals.