Raising capital to grow your mission-driven company?
It all starts with a donor investor.
Impact Foundation is a charity that sponsors donor advised funds, which means we allow donors to recommend how the assets in their Impact Accounts will be invested and granted. We do not have a pool of capital ready to be deployed.
How does Impact Foundation engage with enterprises?
We don’t have a pool of capital that we decide how to deploy. We make only the investments that our Impact Account holders recommend. And we cannot fundraise for your company as that would violate a few IRS rules for what charities like Impact Foundation are allowed to do.
We can still help. As you are out raising capital for your enterprise, you can offer people two ways to fund the investment: from their personal capital or using charitable capital from a donor advised fund or private foundation. For those who are generously minded and have set their personal financial finish line, investing in your enterprise through Impact Foundation can be an attractive option.
The Process
Vet the investment.
Complete the application and we will review and vote on the proposed investment. This usually takes around 7-10 working days once we have all the information needed.Open an Impact Account
The Donor/Investor sends capital to his or her Impact Account. This can be sent as a grant from a private foundation or a donor advised fund.Document and Fund
All documents are signed electronically. The Donor/Investor will sign an Investment Recommendation Letter (IRL). We sign investment documents with the enterprise. Then we can wire funds.Ongoing Management and Reporting
At this point the funding stage of the investment is complete. During the life of the investment, we will manage tax reporting, voting shares (if needed), collecting loan payments or distributions and collecting impact data from the enterprise.Returns
Investment proceeds less any fees or taxes due will be available for the donor/investor to reinvest or grant to another DAF or charity
Resources to help you along the journey
Wondering whether a SAFE or Convertible Note is best? Check out this article.
Faith Driven Entrepreneur—encouragement, inspiration, tools, blogs, podcasts to encourage you in your entrepreneurial journey
Feast Over Famine—Helping servant hearted organizations to scale effectively & navigate the tension where mission and profit collide -
Ibec Ventures—More than a decade in the Business As Mission consulting and education business
Praxis Labs—a 6-month accelerator program with two tracks (for-profit companies and charities)
Redemptive Methodology
What does it mean to describe a company’s impact as “redemptive methodology”?
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 to intentionally participate in God’s transformational work in the lives of employees, vendors, & customers while creating sustainable value.
FAQs
What happens next?
We will vet documents submitted through our online application above, and our investment committee will vote on the proposed investment. This usually takes around 7-10 working days.
The Donor/Investor sends capital to their Impact Account to cover the investment plus fees. See below for fee structure. Investment and fees can be sent as a grant from a private foundation or a donor advised fund. Donor/Investors can also send personal capital, in which case we will issue them a charitable receipt.
Donor/Investor signs an Investment Recommendation Letter (IRL) that we send electronically (via Adobe Sign). It outlines donor/investor's desire to make the investment
We sign investment documents with the enterprise.
We send a wire to the enterprise to fund the investment.
At this point the investment is complete. During the life of the investment, we will manage tax reporting, voting shares (if needed), collecting loan payments or distributions and collecting impact data from the enterprise.
Investment proceeds less any fees or taxes due will be available for you to reinvest or grant to another DAF or charity.
What is your fee structure?
Our donor advised fund fee is 85bps (0.85%) annually on assets under management, excluding available cash. This is assessed monthly from available cash. When we make a new impact investment, we charge a one-time 3% origination fee on the total value of the investment (minimum fee on a single investment is $1,000 and maximum fee is $90,000). We colloquially refer to these as “fees” but it’s really a grant. We are a 501(c)(3) charity so both the annual and origination assessments are charitable contributions.
Will my Impact Account pay taxes on investment income?
It depends. Even though Impact Foundation is recognized as tax exempt, we may be liable for tax on our unrelated business income. This is a complex area of law, but in general, investment income will not be taxed unless it is earned through business activities that are not closely related to our charitable purpose. Rental income, royalties, dividends, and interest income are generally not taxable. If income is taxable, there are a number of strategies we employ that may reduce the amount of tax owed.
What if I don’t have one of the documents that you request?
If you’re missing something on the list, just let us know and we can discuss. Many times, we’re able to live without one of the requested docs if we can obtain the information in another form.
“Our endgame is for our venture to be an agent of redemption as we act as the hands and feet of Christ in the world, knowing that He is ‘making all things new’.”
— Dave Blanchard, Praxis Labs
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