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

Does your organization need to earn more about impact investing? This Pretty Good Tool can help you and your trustees explore the concept of impact investing.

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.

Impact Investing News

July 18, 2019

It’s magic to watch impact investing happen in a small town. In June, a group of local people met in Missoula, Montana for 90 minutes and crafted a $300,000 loan enabling a nonprofit organization to buy land for an innovative affordable housing development. Their transaction paves the way for Homeword to develop up to 72 new homes and support services that are sorely needed in Missoula. 

May 30, 2019

There is nothing like impact investing to bring mental models to the fore for foundation boards and investing committees. We all have our view of impact investing, and it is often based on “something I heard” or a random example.

November 26, 2018

Behind every great foundation is… a lot of money. We know those funds have to be invested to generate returns that pay for grants and operations. But can the money at the heart of the foundation business model be responsive to a foundation’s important values of diversity, equity and inclusion (DEI)? The answer to this question is yes. You can read all about it our new report that includes interviews with executives at eight large foundations that have embraced organization-wide DEI efforts.

July 9, 2018

Risk is a huge and relevant topic for investors. Rosalie asks, "do we take it too far?" This post is part of a multi-part blog series about innovative foundations and financial advisors working to make impact investments in the (mostly) Pacific Northwest region.

March 22, 2018

The first in a series of "Front Row Seat" vignettes on impact investing, I'm pleased to share how Northwest Area Foundation has cracked an important investing nut for foundations—finding market-rate investments in its rural, small-town service areas. They did it, and you can too.