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 create a renewable cycle of return and reinvestment? When we begin to ask these questions, we begin to speak the language of impact investing.
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.
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. Cascadia Foodshed Financing Project 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, Cascadia Foodshed Financing Project 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: