Community Foundations and Impact Investing

Forbes reports that a growing number of community foundations are using impact investing to achieve their mission. The article is based on findings in   A New Anchor Mission for a New Century, a new report issued by the Maryland-based Democracy Collaborative.  The authors studied and report on 30 innovative community foundations  (29 in the States and one from Edmonton) that are doing much more than grant-making to effect change in their communities. In addition to highlighting the objectives, benefits, barriers and the steps for starting an impact investing program, the report identifies the following four strategies: Partnering with community development financial institutions (CDFIs) Creating loan pools Providing loan guarnatees Direct investment in local economic development efforts. The report also provides further details on each of the 30...

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Measuring Social Impact

Measuring Social Impact

How do we know if we’re succeeding?  We’re currently working with a US-based CDFI to refine and implement a usable and informative set of financial and impact metrics. As part of the process, we’ve uncovered some great examples from other funds.   Here are some of the best: SJF Ventures Impact Report – documents the impact of this 15-year old venture capital partnership The Reinvestment Fund – Impact Report from the Philadelphia-based CDFI Vermont Community Loan Fund’s most recent annual Social Impact Report – (Disclaimer – I still serve on one of their loan committees and was the founding Director…) If you have other examples, please share...

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Canadian Impact Investing Resources

Canadian Impact Investing Resources

Community Foundations of Canada (CFC) has taken a leadership role in encouraging its members to consider implementing the Canadian Task Force on Social Finance recommendation that foundations invest at least 10% of their capital in mission-related investments (MRI) by 2020. CFC currently provides a number of resources for and about impact investing and Canadian community foundations including information about the range of approaches, investment options and resources.  ...

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Impact Investment Due Diligence

Impact Investment Due Diligence

We recently provided due diligence reports on impact investments for charitable foundations in the US.  Due diligence clients have included the Vermont Community Foundation, High Meadows Fund and the Castanea Foundation.  All three foundations are leaders in using impact investments to further advance their public-purpose missions.  The Vermont Community Foundation is committed to building philanthropic resources that will sustain healthy and vital Vermont communities now and into the future.  High Meadows is extremely concerned about the impact of a changing climate.  They focus their activities on energy, land use and sustainable agriculture.  Castanea’s mission is to conserve and protect agriculturally productive and environmentally significant land and water resources in its target region. The Vermont Community Foundation (VCF) is a leader among community foundations in impact investments.  In 2002, VCF’s Board made the commitment to invest up to 5% of its capital pool in mission-related projects within the state.  By the end of 2013, the foundation had over $7 million invested in Vermont-based organizations and businesses.  Initial investments were made in regional intermediaries like community development financial institutions (CDFIs) and venture funds; more recently the fund has made direct investments in businesses and organizations.  VCF helped develop the Community Foundation Field Guide to Impact Investing, now used by community foundations across the US. The High Meadows Fund is committed to promoting vibrant communities and a healthy natural environment while encouraging long-term economic vitality in Vermont. The Fund helps Vermonters mitigate the impact of climate change and adapt to its consequences, such as extreme weather events.   High Meadows invests a portion of its assets in enterprises that encourage new farm and food businesses, land conservation, and building performance improvements that lower the reliance on fossil fuels, typically through pooled...

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New Canadian Report on Mobilizing Private Capital

New Canadian Report on Mobilizing Private Capital

MaRS’ Centre for Impact Investing has just published “Mobilizing Private Capital for Public Good: Priorities for Canada,”  a report by Canada’s National Advisory Board to the G8’s Social Impact Investment Taskforce. The report notes that “Impact investing in Canada is on the rise, but it will require leadership from governments, foundations, pension funds, entrepreneurs, non-profit organizations (NPOs) and others to reach its full potential.” Key recommendations include the following: Enable impact investment and social entrepreneurship in the charitable and non-profit sector, in particular by updating the Income Tax Act and related guidance, which have not kept pace with these trends. Establish an impact investing matching program, paired with appropriate incentives such as credit enhancements, guarantees and tax advantages, which have been used to good effect to attract investment to other markets in support of public policy priorities. Establish an outcomes payment fund, specifying maximum prices that the government will pay for certain outcomes, allowing the market to respond with innovative solutions. Social service providers, in turn, can gain access to impact investment capital based on the government’s commitment to pay when outcomes are...

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