Impact Investors

Foundations in the U.S. collectively control nearly $750 billion dollars, and our total giving is over $50 billion per year. That’s impressive, but it’s only 6-7% of our total financial capital.

What are we doing with the other 94% of our capital? How can we put more of our assets to work in service of our mission, while continuing to generate financial returns and creating a renewable cycle of return and reinvestment? When we begin to ask these questions, we begin to speak the language of impact investing.

The Impact Investing Continuum

Impact investments are investments designed to produce social outcomes while also generating financial returns. Foundations, funds, individuals and companies can all be impact investors. Impact investments are found across all asset classes and all levels of risk and return.

Typically, market rate impact investments are part of a foundation’s endowment, while below-market investments (including program-related investments, aka PRIs) are, like grants, charitable distributions. While the majority of impact investments are made with debt instruments (i.e., notes and loans), impact investments can be made across all asset classes, including equity investments, deposits and cash equivalents, guarantees and real assets (i.e., land and real estate).

Impact investing is a vibrant and fast-growing field — regionally, nationally and globally. It is also known as mission-aligned investing, mission-related investing, mission investing, sustainable investing or socially-responsible investing.

For more information, Philanthropy Northwest members can log in to access our impact investing digital resource center.

Incubating Impact Investing

Cascadia Foodshed Financing Project is an emerging collaboration of foundation and individual impact investors coming together to grow the local food economy in Oregon and Washington. CFFP targets five impact areas: Health, Social Equity, Family Wage Job Creation and Preservation, Rural Community Resilience, and Ability to Influence Policy. From the notion that the best learning is from doing, CFFP is involved in action-oriented strategies that advance the fields of food, finance and philanthropy.

Our consulting team at The Giving Practice offers a full suite of services to help you explore, launch or deepen an impact investing program, including: strategy, governance, program design, operations and communications.

 

A Thriving Regional Ecosystem

The Northwest has a thriving impact investing ecosystem, and through our network, programs and publications, we are championing the pioneers of this field. The following Philanthropy Northwest members and partners have active impact investing programs:

Impact Investing Resources

This case study identifies untapped areas for co-investment in regional food economies in Oregon and Washington, then outlines a combination of grantmaking and investment strategies for transformational impact.

Investing in a Community Development Financial Institution (CDFI) is a powerful way to directly engage in the local economy and increase access to capital in minority, underserved communities. This guide was developed with the support of the Satterberg Foundation to help board and staff members in the philanthropic sector examine the basic processes of building a relationship with a CDFI and structuring investments in it.

The Council on Foundations-Commonfund Study of Investment of Endowments for Private and Community Foundations is the authoritative and comprehensive annual survey of the foundation investment and governance practices of private and community foundations.

When Surdna Foundation made the decision to allocate $100 million to impact investing, there was not a wide breadth of funds and tools available. As part of its investment, Surdna seeks to share its experience with others thinking about impact investing through this publication, drafted by The Giving Practice's Senior Partner Jan Jaffe.

The Social Innovation Fund (SIF) selects grantees through open competitions that have expertise in helping nonprofits expand capacity and build a track record of strong evidence and impact. With its emphasis on evaluation and results, the SIF seeks to grow the impact of successful programs to accelerate broad-scale change. This 109-page report presents an overview of its portfolio.

Impact Investing News

September 6, 2017

Philanthropy Northwest is exploring a bond fund that would give members an easy new way to make investments in the communities they care about. Modeled after a successful effort in Minnesota, we’re excited to explore this opportunity with our members. I’ll be hosting a lunch meeting during the annual conference where members can learn more and share ideas. 

February 22, 2017

One hundred million dollars.

That’s how much money Surdna Foundation has now allocated to impact investing, just in time for its 100th anniversary. It’s an exciting decision, and you can read all about the private foundation's decision-making process in Mapping the Journey to Impact Investinga new report researched and drafted by Jan Jaffe, senior partner of The Giving Practice, Philanthropy Northwest's national consulting team.

February 13, 2017

As Cascadia Foodshed Financing Project works at the intersection of food, finance, and philanthropy to transform the Pacific Northwest regional food system, we ask the question, “how good is good enough?” With regards to individual investment opportunities, does the investment meet a need expressed by the community? What ripple effects might the investment have? Social impact advisor Katherine Pease of KP Advisors asks this critical question of the impact investing field at large.

January 19, 2017

The recent election cycle has reminded us that even though the United States is one nation, we have many different ideas on how to make our country better. As I've been sharing Cascadia Foodshed Financing Project’s recent market research over the past few months, commissioned to identify strategies to grow Washington and Oregon's food economy, I've had a similar realization: We can all read the same research yet come to different conclusions about how to grow our regional food economy. Not surprisingly, our nonprofit and for-profit reviewers have come up with different investment recommendations. This divergence can be attributed to a logic model gap, or a difference in the tools used by different departments to implement a shared mission. For instance, a foundation program department may seek opportunities to catalyze system transformation, while the same foundation’s finance department seeks a positive financial return. As we "ground truth" our research, we are also seeking to understand if the conclusions touch on real investment opportunities.

August 22, 2016

If we want to catalyze a thriving food economy in the Pacific Northwest, where should we invest our philanthropic funds? We commissioned research into the production costs of six categories — no-till grain, grass-finished beef, organic greens, organic storage crops, pastured chicken, and hoop house pork — to identify differentiated and viable production systems aligned with our project's five overarching principles of health, social equity, family wage job creation and preservation. The results have revealed intriguing insights for our regional food economy, venture philanthropy and impact investing. We want to achieve system change to increase more sustainable food production and to build resiliency in rural communities. We want to support enterprise success so that rural communities can generate livable wage jobs and investors can at least preserve capital. We now know where we can do each; we seek the opportunity to do both. Now we're asking a new question: How can we advance system change by supporting success at the enterprise level?