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The mission of the Your Mark on the World Center is to solve the world's biggest problems before 2045 by identifying and championing the work of experts who have created credible plans and programs to end them once and for all.

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Impact Investing

This category includes articles about people, firms and foundations that invest in social good by investing in social entrepreneurs, social impact or pay-for-success bonds, etc.

Turning Sunlight Into Tax Advantaged Income

Clean Energy Advisors sponsors the Your Mark on the World Center which publishes this site.


You can download an audio podcast here or subscribe via iTunes.

Many people are looking for practical ways to participate in the booming solar energy industry. Clean Energy Advisors, our sponsor, offers a way for accredited investors to participate in solar energy projects.

The Clean Energy Advisors investment model is described in the video below.

We all understand the primary appeal of solar power is that the fuel–sunlight–is free and abundant. CEA uses investors’ capital to fund small utility-scale solar projects. Each project has a contract, typically 25 years, in place to sell solar power. The buyer or “off taker” is obligated to buy all of the power produced during the contract. The off takers are carefully underwritten to assure future cash flows. The off takers are usually utilities who sell the power to commercial and residential customers who otherwise might receive power from nonrenewable sources.

The power purchase agreements or PPAs are structured as fixed rate contracts for the term of the agreements. CEA receives and manages the revenues and then makes quarterly, tax advantaged distributions to investors. Payments made during the first seven years are deemed to be tax free.

Diagram explaining investment thesis

Click to view full size.

On Thursday, September 29, 2016 at 3:00 Eastern, Scott will join me here for a live discussion about the Clean Energy Advisors tax-advantaged model for investing in solar energy. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Scott Hill, courtesy of Clean Energy Advisors

Scott Hill, courtesy of Clean Energy Advisors

More about Clean Energy Advisors:

Twitter: @cleanenergyadv

Clean Energy Advisors (CEA) creates ownership opportunities for investors in utility scale solar energy projects that generate tax-advantaged predictable income, preserve capital, and have positive social and environmental impact.

Scott’s bio:

Twitter: @williamandhill

Scott Hill has over twenty years of entrepreneurial experience including a significant perspective on business start-ups and building successful small businesses. Mr. Hill has been with CEA since April 2014.

His duties include overseeing the firms family office, endowment, foundation, and UHNW client strategies. He has served as a panelist at US based family office conferences and enjoys speaking on impact investing, renewable energy opportunities, and the future of Solar PV worldwide.

Scott is a 1991 graduate of Columbia University and four year member of the football program. He lives near Nashville, TN with his wife and children. He’s also actively involved in his community and church.

Never miss another interview! Join Devin here!

Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

 

Impact Investing Expert Proposes ‘Impact Classes’ To Parallel ‘Asset Classes’

This post was originally produced for Forbes.

To paraphrase the great philosopher Forest Gump, impact investing is like a box of chocolates; you never know what impact you’re going to get.

One of the foremost experts on impact investing, Cathy Clark, Director of CASE i3 at Duke University, is working on that problem. She is focusing on labeling impact into categories that will be recognized by investors and issuers alike.

Sasha Dichter, Chief Innovation Officer at Acumen, sits on the advisory board for CASE i3. Of Clark, he says, “She understands where the field is and where it is going, and her thinking and writing consistently push the field forward.”

Clark says, “Impact Investing is hard to navigate. It covers a lot of activity in different areas done by different people. Yet the interest has never been higher. How can we simplify the field and make it easier for newcomers and experts to find the partners they need and help new investors find the products they want, more efficiently?”

“Getting the terms and categories right for people to customize their own portfolios is an essential building block that seems to be missing right now,” she says.

In light of the challenge, Clark has been working with Tideline to define the problem and start the work on a solution.

Dichter notes that Clark is an effective collaborator. “Cathy has a unique knack for partnership, bringing together practitioners and academics to created grounded, thoughtful pieces of work that address gaps in the underlying infrastructure of impact investing – whether market segmentation, impact measurement or new product development.’

Cathy Clark, courtesy of CASE i3

Cathy Clark, courtesy of CASE i3

Of the collaboration with Tideline, Clark says, “Together we interviewed experts across the field to hone in on what makes the field confusing. From this, I’ve developed an analogy that explains the issue a bit more clearly, and we’re started to float a possible solution: the idea of creating ‘impact classes’ to go alongside ‘asset classes’ to help people label and track the kind of impact they expect to achieve with their investment dollars.”

It looks like she’s on to something. “Over 80% of respondents to a recent survey thought it was a good idea,” she reports.

Ben Thornley, Managing Partner of Tideline, says of his work with Clark, “Cathy’s work has been catalytic for the fields of social entrepreneurship and impact investing – and, importantly, translating between the two. Cathy has that unique blend of intense intellectual curiosity and passion for sharing and collaborating on ideas that make her the ideal guide. She dives deep — delivering case studies and other analyses of the highest order — but is also able to communicate complicated findings with tremendous clarity, at multiple levels – for students, CEOs, funders, investors, and policymakers, which is why she is so sought after.”

The collaboration with Tideline yielded a report, which you can download here.

There are two distinct challenges that make the creation of impact classes difficult.

First, she says, “If everyone knew the kind of impact they wanted to achieve, we wouldn’t need a new labeling system.”

Second, she says, “Some providers are doing very well and actually financially benefiting from the lack of clarity as they talk to potential investors.”

This dual set of issues results in both “confusion and real resistance,” Clark explains.

“On the other hand, when you ask some considering a new impact investing,” she continues, “would you want a simple label that communicates the kind of impact you can expect, and allows you to diversify those impact expectations across a portfolio, nearly everyone says yes.”

This suggests a need to address the problem despite the challenges and implies that the key to success may to be to work with the investors to create demand or impact class labeling, she says.

Clark, who co-authored with Thornley and Jed Emerson the definitive book on impact investing–The Impact Investor–acknowledges that creating a simple classification system from the nearly infinite number of ways that people define impact today will be difficult.

She says, “I helped create the B Corp standards and have been a huge supporter of the IRIS metrics. This would not replace those, but would work to simplify them into some common categories. Almost like archetypes. Getting to consensus on this level of simplification will take a lot of time and interaction.”

Clark believes that her vision of providing a classification system would increase impact investing by making it easier.

“If everyone puts a portion their investment dollars to work toward impact and they come away satisfied with the impact–and financial return–they achieve, we will have changed the expectations of the financial system forever. Because if you could make things happen that you believe in and get a financial return, why would you ever want just financial returns again?”

On Thursday, September 1, 2016 at 1:00 Eastern, Clark will join me here for a live discussion to talk about impact classes and the implications for the impact investing industry. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Place-based Education, Entrepreneurship and Investing for an “Impact Economy”

This is a guest post from Laurie Lane-Zucker, the Founder and CEO of the Impact Entrepreneur.

A little over twenty years ago, Dr. John Elder and I coined the term “place-based education” to give a name to the pedagogical model we were developing at The Orion Society with funding from the Geraldine R. Dodge Foundation.

In my introduction to the Orion book, Place-Based Education: Connecting Classrooms and Communities (Sobel, 2004), I frame place-based education in these terms:

“In an increasingly globalized world, there are often pressures for communities and regions to subordinate themselves to the dominant economic models and to devalue their local cultural identity, traditions and history in preference to a flashily marketed homogeneity. Furthermore, at a time when industrial pollution, biodiversity/habitat loss, and aquifer depletion are becoming widespread and acute, such pressures often exacerbate the problems by encouraging unsustainable patterns of consumption and land use, and by weakening familial and community relationships that are deeply tied to the local environment. A process of disintegration occurs as basic connections to the land fray and communities become less resilient and less able to deal with the dislocations that globalization and ecological deterioration bring about. A community’s health — human and more-than-human — suffers.

“Author, farmer and conservationist Wendell Berry describes disconnections that are now familiar to many of us.

We are involved now in a profound failure of imagination. Most of us cannot imagine the wheat beyond the bread, or the farmer beyond the wheat, or the farm beyond the farmer, or the history beyond the farm. Most people cannot imagine the forest and the forest economy that produced their houses and furniture and paper; or the landscapes, the streams and the weather that fill their pitchers and bathtubs and swimming pools with water. Most people appear to assume that when they have paid their money for these things they have entirely met their obligations.

“The path to a sustainable existence must start with a fundamental reimagining of the ethical, economic, political and spiritual foundations upon which society is based, and that this process needs to occur within the context of a deep local knowledge of place. The solutions to many of our ecological problems lie in an approach that celebrates, empowers and nurtures the cultural, artistic, historical and spiritual resources of each local community and region, and champions their ability to bring those resources to bear on the healing of nature and community.

“Schools and other educational institutions can and should play a central role in this process, but for the most part they do not. Indeed, they have often contributed to the problem by educating young people to be, in David Orr’s words, ‘mobile, rootless and autistic toward their places.’ A significant transformation of education might begin with the effort to learn how events and processes close to home relate to regional, national, and global forces and events, leading to a new understanding of ecological stewardship and community. This, I believe, supports the propagation of an enlightened localism — a local/global dialectic that is sensitive to broader ecological and social relationships at the same time as it strengthens and deepens peoples sense of community and land.

“Place-based education might be characterized as the pedagogy of community, the reintegration of the individual into her homeground and the restoration of the essential links between a person and her place. Place-based education challenges the meaning of education by asking seemingly simple questions: Where am I? What is the nature of this place? What sustains this community? It often employs a process of re-storying, whereby students are asked to respond creatively to stories of their homeground so that, in time, they are able to position themselves, imaginatively and actually, within the continuum of nature and culture in that place. The become part of the community, rather than a passive observer of it.”

A couple years after I wrote these words about place-based education, I became immersed in the newly launched B Corporation and impact investing worlds, as the founder of one of the first, “founding” B Corps and the recipient of some of the first (and, in the case of Mission Markets, the first) impact investments under that new blended value, triple bottom line rubric.

A few years after that, I coined the term “impact entrepreneur” and established a LinkedIn group and, more recently, a consulting company by that name. The virtual global network, now with 12,000 members in 200 countries, has been anything but “place-based”. At least until now. Over the last six months, I and three other (thankfully quite brilliant)team members have been working on plans for a new Impact Entrepreneur Center and replicable model for “place-based economic development.” While inspired by the growing impact entrepreneurship and impact investing movement, it also shares many of the same motivations and principals of place-based education. Here is how we describe this new model in our just-completed Business Plan:

“As the impact (entrepreneurship and investing) movement has risen and begun to coalesce, the ground has become fertile for the next great shift forward. This shift will require the fusion of conscious consumerism, impact investing, social entrepreneurship, new legal frameworks and financial tools, expanded entrepreneurship education, cross-sector collaboration, and the incubation and acceleration of impact enterprises, region by region. Place-based economic development of this kind will both trigger and integrate the creation of positive economic, social and environmental value coincident with the launch, acceleration and development of impact enterprises. The Impact Entrepreneur Center will be one of the world’s first large-scale attempts at this integration, and will help define what an “impact economy” could be and how it might function.”

We believe that in a world of growing social inequities and severe ecological distress, the development of regional, place- based impact economies fueled by triple bottom line contextual thinking and social and environmental innovation will provide the most sensible and practical path toward creating a resilient and prosperous future for local communities as well as global humanity.

Our place-based, impact economymodel, which will be designed to be replicable in other regions around the United States and the world, will be incubated in our home region of Berkshire County, Massachusetts. The IEC, according to our business strategy, “plans to lay the groundwork for the concept of an impact economy in the Berkshires by gathering data and cultivating the thought leadership on this concept; designing, developing and delivering curricula for middle school students to adults (think Place-based Education 2.0) that will enhance the understanding of impact economies and provide technology and tools to grow impact enterprises in Berkshire County (and beyond); and recruiting, retaining and scaling regional enterprises that intend to grow using the triple bottom line approach to business development.”

Place-based education, entrepreneurship and investing is the next wave of the impact movement. The Impact Entrepreneur Center is committed to making that wave tidal and universal.

Laurie Lane-Zucker

Laurie Lane-Zucker

About Laurie Lane-Zucker:

Twitter: @laurieLZ

Laurie Lane-Zucker is Founder and CEO of the Impact Entrepreneur, a global network of entrepreneurs, investors, scholars and students of social and environmental innovation; a consulting company (LLC) that works “between the seams” of the network; and the newly launched nonprofit Impact Entrepreneur Center for Social and Environmental Innovation.

5 Tips For Changing The World With Technology Investments

This post was originally produced for Forbes.

Cecile Blilious is a social venture capitalist in Israel who is out to change the world. She offers five tips to help other investors do the same with investments in technology that offers a social benefit or social technology.

As Co-Founder and Managing Parter, Blilious leads Impact First Investments, which she describes as the “first Israeli investment firm specifically designed to leverage local technology and innovation to create global social impact.” The firm focuses exclusively in investments in Israel that have technology solutions to global social problems.

The fund earns its fees in the traditional manner with a management fee of 2.5 percent annually and a carried interest of 20 percent that entitles management to one-fifth of the profits on the investments. The team today includes five people with a six-member advisory board. The firm is now in the fundraising stage.

Blilious believes that she is herself a social entrepreneur. She says, “By working with Israel’s world class tech developers and social entrepreneurs, Impact First seeks to address the pains of millions of people, in a sustainable, measurable, profitable way.”

Nechemia Peres, Managing Partner and Co-Founder of Pitango Venture Capital, which has committed to invest in Impact First Investments and is hosting the younger firm in its office space, says, “I think they are doing a professional job full with enthusiasm and persistence. In addition to that they combine social investing, Israeli innovation, and a moral code and values–all of which are emerging trends on a global basis. They make a real contribution to humanity.”

Cecile Blilious, courtesy of Impact First Investments

Cecile Blilious, courtesy of Impact First Investments

Blilious offers the following five tips for changing the world through investments in social technology:

  1. Do not sacrifice on talent.
    The team you create to build your company is going to determine your success. Building the right team means finding skilled individuals with the training and experience necessary to address all of the issues your business is going to face. Running a startup requires you to think about the bigger picture, not only in terms of your company growth and market place, but the people you need to execute your plan.
  2. Be profitable with a defined theory of change.
    Create a profitable business, but one with a defined theory of change. A startup that seeks to address a pressing social issue must have the same growth potential and profitability as any other startup company. To succeed as a business that improves people’s lives, you need to operate with a clear, defined theory of change.
  3. Incorporate an intrinsic mission.
    Make sure that achieving your mission is an intrinsic component of your business plan. This means building social change into the DNA of your company, so that with each dollar earned a social improvement is created. A company who does this will not be able to good without making money, and will not be able to make money without doing good. They should come hand-in-hand, not as separate operations.
  4. Build the best board you can.
    Investors are not simply people who provide your company with financial capital. The people who you choose to go into business with can, and should, bring more to the equation than their checkbooks. Your investors and board members should be aligned with your mission and can provide business support. Look for people who have experience in the field and a sincere mission to create good in the world.
  5. Cooperate with international partners.
    If you’re seeking to create change on a global scale, finding the right international partners is a significant piece of the impact puzzle–these are the people that will help your company access new markets and create global impact. Before launching, this requires extensive research and networking. A strong board that is aligned with your mission, and a skilled staff, will go a long way in executing this strategy.

On Thursday, July 21, 2016 at noon Eastern, Blilious will join me here for a live discussion about her five tips for changing the world with impact investments in social technology. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Prior to founding Impact First, Blilious managed a portfolio of Israeli investments for the Noaber Foundation, where she served as a board member and/or as chairperson for several companies. Previously, she served as CEO of several companies, she says.

Remarkably, she is proud of having served as an initiator of the Al-Bawader private equity fund that invested in businesses in the Arab community in Israel.

Is Impact Investing A Solution To Global Problems?

This post was originally produced for Forbes.

“Some of the world’s most intractable social and environmental problems are in need of new solutions. From climate change to resource scarcity to exploding global population growth, the traditional levers of change, including philanthropy and government aid, are insufficient to address the critical issues of our time,” says Fran Seegull.

Seegull, Chief Investment Officer and Managing Director for ImpactAssets, says impact investing may be the key to solving global problems. Impact investing is the practice of investing funds for both a financial return and social impact.

ImpactAssets is a nonprofit financial services firm that earns fees from managing donor advised funds and other investment products. It also receives grant support, largely to help with its advocacy work for the field of impact investing. The nonprofit has $292 million under management and has 17 employees. It was originally founded under the wings of the Calvert Foundation.

Seegull, who earned an MBA at Harvard, describes herself as an entrepreneur. “We see ourselves as impact entrepreneurs at ImpactAssets. ImpactAssets is a 501c3 non-profit organization dedicated to increasing the flow of capital to impact investing through innovative product development and field building. I consider myself to be an impact entrepreneur. I have devoted my entire career to creating impact from philanthropy to venture capital to impact investing.”

As a social entrepreneur, Seegull observes that those most affected by climate change, population growth and resource scarcity are the world’s poor. She points out that the world population of 7.3 billion is expected to grow to 9 billion by 2050. Three billion now live on less than $2.50 per day and 80 percent of the world’s population live on less than $10 per day. Furthermore, she notes, 805 million people don’t have enough food to eat and three-quarters of a billion lack access to clean drinking water.

She says that impact investing may be the solution. “By harnessing the power of capital markets and focusing on maximizing stakeholder value (not just shareholder value), impact investing addresses the systemic challenges of poverty, income inequality and climate change.”

“Our goal is to ‘scale-up’ and ‘democratize’ impact investing,” she says.

Working toward that goal, ImpactAssets offers impact investments with lower minimums. For instance, Seegull says, “The Giving Fund – an innovative donor advised fund – features an impact investment platform of public and private debt and equity.”

Even more novel are the “Impact Investment Notes” that provide ordinary investors the opportunity to invest in microfinance and global sustainable agriculture through ImpactAssets.

Ron Cordes, co-founder of ImpactAssets, says the nonprofit is “leading the democratization of impact investing” with the Impact Investment Notes.

In the effort to foster growth in the field of impact investing, ImpactAssets publishes issue briefs, authored by Jed Emerson and other impact investing leaders, on a range of impact topics from portfolio construction to trends among women and millennials.

In addition, ImpactAssets offers an imprimatur to fund managers in the space. “The IA50 is the industry’s first open-source database of impact investing fund managers. It is the equivalent of the ‘Good Housekeeping Seal of Approval’ for impact investors,” Seegull says.

Interest in and activity around the impact investing space has increased since the White House convening on impact investing in 2014. Challenges to growth remain, however.

Fran Seegull, courtesy of Impact Assets

Fran Seegull, courtesy of Impact Assets

Seegull sees two particular challenges that ImpactAssets is working to overcome. The first is engagement with financial intermediaries. While most are now comfortable with ESG concepts, environmental, social and governance considerations, far fewer are ready to engage in “deep impact” investing, she says. “The next step: Facilitate deep impact investing – smaller private debt and equity funds – on mainstream platforms without compromising due diligence.”

More broadly, she sees a need to establish a new business model for deep impact investing. “Creating impact deal platforms and groups that syndicate investment in individual deals and funds could make deep impact more efficient and accessible.”

Jennifer Kenning, Managing Director of Align: Your Impact Partner, a financial advisory firm that works with ImpactAssets, suggest that “ they need to have enough assets under management to be able to hire the right talent and retain them with a strong emphasis on investment markets.” She adds, that “they need to take the platform and evolve it to 2.0 and enhance it for the significant growth in the space across all asset classes.”

Seth Goldman, founder of Honest Tea, which sold to Coca-Cola in 2008, is a client of ImpactAssets. He notes, “I’d love to see more investors join the fold. I can’t imagine why mission-driven entrepreneurs wouldn’t want to see more ripples flow from any impact they’ve been able to make.”

One of the limitations to expanding impact investing, Seegull notes, is “the perceived tradeoffs between financial and impact returns.” She also notes the difficulty of getting the water to the end of the row, that is the challenge with getting impact investment products all the way to individual investors via intermediaries.

Kenning sums up the ImpactAssets progress, saying, “I think the work has been significant to the forward movement of the impact space in that they have provided education resources to train clients and advisors, they have aggregated almost $300 million in assets for good, provided a platform that allows investors to get gain access to investment vehicles at lower minimums and an easy access point to deploy their capital within those investments. Lastly, they have democratized access by creating the impact notes that they launched earlier this year which allows investors to invest at a significantly lower level of $25,000.”

Goldman adds, “It’s a wonderful way for us to be able to donate and invest in organizations we believe in. I have always believed that powerful change can come from for-profits and non-profits, so it’s ideal to have a vehicle that lets us invest in a way that is neutral in terms of tax consequences. If we see someone building an organization we believe in, we can deploy money from ImpactAssets.”

“It’s been especially fun to see our investments in mission-driven enterprises, such as Happy Baby organic baby food help support two visionary entrepreneurs, and then when that company sold to Danone , see the proceeds go right back into our Impact Assets fund,” Goldman concluded.

Seegull says, “Our success broadens and accelerates investment capital to deep-impact investments that make measurable social and environmental impact as well as financial returns.”

She concludes with a challenge to herself and others in the space to continue working, “We’ve seen success through our product innovation and education in bringing greater flows of capital to impact investing but more needs to be done.”

On Thursday, July 14, 2016 at 4:00 Eastern, Seegull will join me here for a live discussion about impact investing and ImpactAssets work to expand the space. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Is This Wildlife Conservation PhD The Steve Jobs Of Impact Investing?

This post was originally produced for Forbes.

Did the people who met Steve Jobs in 1976 have any inkling that they were talking to the person whose name would for a generation be synonymous with “entrepreneur”? More often, people have believed to have found the next incarnation of Jobs only to be disappointed. Perhaps you can help me determine if the subject of this article could become the Steve Jobs of impact investing.

From my perch in Salt Lake City on the west side of the Rockies, over the last few years I’ve been hearing rumblings from the other side of the mountains. In Denver, Dr. Stephanie Gripne has created one of the most dynamic centers of impact investing and social entrepreneurship in the world. With a goal to catalyze impact investments of over $1 trillion and a plan to get there, it is about time that people outside the Rocky Mountains took note.

Dr. Gripne founded the Impact Finance Center as a partnership between the University of Denver’s Daniels College of Business and the Sustainable Endowments Institute, a special project of Rockefeller Philanthropy Advisors.

In 2014, the Center launched the CO Impact Days and Initiative with a three year goal to catalyze $100 million of impact investment in Colorado-based social ventures. The event has grown into a marketplace for impact investing.

Wendi Burkhardt, co-founder and CEO of the Colorado-based social enterprise Silvernest was an early participant in CO Impact Days. She says, “I am inspired by the opportunities that Stephanie and IFC are creating to employ traditional philanthropic donations as capital investments that offer a substantial return and thereby further the impact and intention of the applied funds. I’m excited by this untapped opportunity to bring these worlds together.”

Will Morgan, Director of Impact for Sonen Capital, has worked with Dr. Gripne for several years, providing grant funding for the Center. He sees the need for the infrastructure that the Center is working to create. “I think IFC’s work is great. Investors are searching for more meaning with their assets and resources. Social enterprises and private businesses that create positive impacts are starved for resources. It’s a natural thought that more infrastructure needs to be put into place so that both sides of the equation can get what they need,” he says.

Jeramy Lund, Managing Director of the Sorenson Impact Center at University of Utah, agrees. He notes that she drove great collaboration. He says, the CO Impact Days event was a big success. “The way she was able to bring together the major foundations and get them to agree on collective impact was impressive heavy lifting. To pull it off on the first year was amazing.”

Dr. Gripne isn’t working to create a marketplace for impact capital by leveraging her Wall Street experience. She doesn’t have any formal finance training or experience.

Rejecting her father’s business career as path for her life, Dr. Gripne earned a PhD in Wildlife Conservation at the University of Montana. Her early career had working in academia, the Journal of Wildlife Management, the USDA Forest Service and the DOE Oak Ridge National Laboratory. It isn’t clear when she learned to calculate the present value of an investment.

It was working with her father, however, that she learned about the power of doing good with investment dollars. “ Before my dad passed, we completed some of my first direct impact investment deals together. We partnered with families going through medical bankruptcy. We basically created an affordable housing model where my family would buy a house and give the families partial equity of their rent and all equity above a ten percent return. These were essentially people with good credit who were faced with a medical emergency and were struggling to make ends meet.”

“That experience – the joy of philanthropy with a financial return — permanently changed my course,” she adds.

Since then, her focus has been on impact investing, not for her own account so much as for her community, her country and the world.

The Center operates its $700,000 annual budget largely through grants today, but Dr. Gripne plans to make it financially self-sustaining. Already, she says, the Center earns some revenue through research and development, thought leadership, education, marketplace Impact Days and sub-advisory services.

She acknowledges that the Center is really just getting started and that it may be too soon to measure future results, but she is optimistic. “Having only just launched this catalytic concept this year, we are currently operating at a negative gross margin of -18%. A significant portion of our expenses come from the development of the intellectual property we’ll be bringing to market in the coming months and years. Once we can begin to generate revenue from that IP in the form of educational workshops and sub-advisory services, we aim to be self-sustaining within 18-24 months, and profitable by 2019.”

Dr. Gripne’s early success comes from her passion. Burkhardt explains, “Stephanie is truly a force of nature and I am always amazed at her ability to produce the results that she does! In addition to her being an incredibly accomplished academic, [IFC] capitalizes on something much greater. It is a true labor of love for her – it is her deepest passion and that fuels her at the highest level of performance.”

Her sense of the problem drives her. Rhetorically, she asks, “In [these] times of economic uncertainty, climate change, and social division, how do we increase the flow of resources to the ventures that will deliver positive impact on our economy, society, and environment?”

To address the problem, the Center helps high-net-worth individuals and institutions with $10 million to $5 billion to invest to do it with more impact and lower fees. Dr. Gripne says, “We do this though outreach, education, and technical assistance that allows them to understand their objectives in terms of financial return, impact, risk, and liquidity and them help them find ways to make their philanthropy more efficient, their investments more effective, and in many cases start directly investing.”

Dr. Stephanie Gripne, courtesy of the Impact Finance Center

Dr. Stephanie Gripne, courtesy of the Impact Finance Center

By way of sample case, she shared this:

For example, we recently assisted, Nicole Bagley, an individual philanthropist and trustee on multiple family foundations to make her first impact investment into Silvernest, a women led technology company working to help the aging population age in place by providing housemates for additional income, companionship, and help around the house. Not only is she looking for her next investment, she is exploring her first impact investment with one of her family foundations and has joined the Impact Finance Center as a Senior Advisor.

Despite progress that some see as remarkable, Dr. Gripne is impatient. She sees building a critical mass of participating investors as her greatest challenge. She needs financial help to create the marketplace she envisions and needs more people to begin investing within that framework. For many, it will be their first impact investment.

Dr. Gripne is all about rapid growth. “We have the research, educational curriculum, and statewide marketplace; we now are in a place of finding the catalytic philanthropic gifts and partners to allow us to scale,” she says.

Morgan notes, “Steph is doing a lot. Frankly, I think she could or should slow down and focus on a few things deeply. She has tremendous potential, and has accomplished an enormous amount with IFC in the last two years. She’s stretched in many directions due to the potential of this burgeoning field of impact investing and she wants to do it all.”

“I’m working on narrowing her focus, but I don’t carry much sway,” he added.

Dr. Gripne sees potential for a multi-national scale to the Center’s work, helping to create a global marketplace for direct investments in social ventures.

“How do we move $1 trillion of investment into our communities? $1 billion a time. How do we move $1 billion into our communities over five years? By investing in the infrastructure to create a national impact investing marketplace,” she says, making the possibility of catalyzing massive amounts of investment capital sound perfectly reasonable.

She concluded our online discussion with this:

Until we build the infrastructure for a national impact investing marketplace that syndicates 10 regional impact investing marketplaces we will not see institutional money flow into our communities at the scale that is needed to solve society’s most pressing problems that include supporting a diverse spectrum of social impact, including improved school readiness, education, accessible jobs, healthy homes and neighborhoods, family economic security, community development and revitalization, climate resilience and more.

On Thursday, June 23, 2016 at 1:00 Eastern, Gripne will join me for a live discussion about her work in the Rocky Mountains and her efforts to build a global infrastructure for direct impact investing. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Watch the interview and in the comments below let everyone know what you think. Is Gripne really on to something here? Could she be the Steve Jobs of impact investing?

Guide to Place-Based Impact Investing


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Impact investing is a rapidly growing field. Lauryn Agnew, President of Seal Cove Financial and the Bay Area Impact Investing Initiative, points out that focusing on a place provides opportunities for collaboration, increased impact and market returns.

Lauryn and I met will participating in a panel discussion at Sustainatopia in San Francisco last month. She is a recognized thought leader in impact investing, focusing on helping institutional investors make place-based investments with an outcomes focus.

She has provided me with three insights to serve as a primer on place-based impact investing. I’ll share them here:

  1. Creating a financial intermediary that can channel a small portion of the institutional assets in any region to local investments can provide capital to local needs and challenges, promoting a long term sustainable and a more prosperous future for the region. Collaboration, professional due diligence, high fiduciary standards and mission alignment would be the benefits we share in our co-investing efforts.
  2. Impact investing with a place-based focus, using a small portion of the portfolio, can provide market rates of return and local impact, if designed properly, without increasing risk or sacrificing returns.
  3. Each asset class has a unique risk and return profile, as well as a unique impact, and building impactful portfolios around asset classes will demonstrate how each part of a portfolio can contribute to long term sustainability and prosperity in the region.

On Thursday, June 9, 2016 at 2:00 Eastern, Lauryn will join me here for a live discussion about these insights, allowing to go deeper and gain a better understanding about how investors can deploy capital for impact and market returns with a place-based focus. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

More about Seal Cove Financial:

Twitter: @bayareaiii

Seal Cove Financial is a specialty firm helping investment firms develop marketing strategies and providing research and fiduciary education to trustees of non-profit and public investment funds. The Bay Area Impact Investing Initiative is a research and outreach effort to promote the ideas behind place-based investing for institutional investors, particularly in the Bay Area, with a focus on promoting sustainable prosperity in the Bay Area with investments aross all asset classes.

Lauryn Agnew, courtesy of Seal Cove Financial

Lauryn Agnew, courtesy of Seal Cove Financial

Lauryn’s bio:

With nearly three decades of experience in developing and implementing strategies in the institutional investment industry, Lauryn Agnew serves as a resource to non-profit organizations for investment consulting services and provides fiduciary education and trustee training for public fund and non-profit board and committee members.

Lauryn Agnew leads the Bay Area Impact Investing Initiative (www.baiii.org) in developing customized model portfolios across all asset classes for mission alignment under fiduciary standards of due diligence and performance expectations. She has authored the research paper which is posted on the website of the Federal Reserve Bank of San Francisco: Impact Investing for Small Place-based Fiduciaries: The Research Study Initiated by the United Way of the Bay Area. Her next in-depth research paper into regional impact investing model portfolios will be released in mid 2016 by Oxford University. She is a frequent participant on institutional investment panels and educational seminars on impact investing and presented her research at the Social and Sustainable Finance and Impact Investing Conference in Oxford, England in April, 2015.

For over 15 years Lauryn served as a trustee and was twice Board Chair for the San Mateo County Employees’ Retirement Association (www.SamCERA.org), a defined benefit plan with $3.5 billion in assets. She has chaired both the investment committee at the United Way of the Bay Area and the investment committee of the Girl Scouts of Northern California for many years and continues to serve on the committees. She also serves on advisory committees for the Girl Scouts of the USA Pension Plan, Cornerstone Capital, and the Community Bank of the Bay’s Bay Area Green Fund.

Lauryn was born in Wyoming and grew up in Montana. She has a BA degree in Economics from Whitman College in Walla Walla, Washington and an MBA in Finance from the University of Oregon. She has been a long-time member of the CFA Society of San Francisco and the Financial Women’s Association of San Francisco.

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Devin D. Thorpe

CAPROCK Group Launches Impact Assessment Visualization Tool

This post was originally produced for Forbes.

The CAPROCK Group, led by Matthew Weatherley-White, has recently launched a new tool for their family office clients to help them better see the impact they have with their investments. The tool, called iPAR, allows clients to drill down on their investments to see the impact in a simple, easy-to-use format.

CAPROCK has about $3 billion under management, about 30 employees and five offices. The firm’s revenue model is to charge clients fees for managing their money. Weatherley-White adds, “The only people who have the privilege of paying us are our clients, on either a flat fee or a percentage of assets advised. We accept no compensation from any other source.” He says the firm is profitable and generates a gross operating margin of 25 percent.

Of the firm’s $3 billion, $1 billion has been invested for impact. While Weatherley-White says he doesn’t consider himself a social entrepreneur, I think he better be careful or he’ll become one. Certainly he is an impact investor.

In fact, I visited with him for a Forbes piece on impact investing basics a few years ago.

iPAR stands for “Impact Portfolio Allocation Review” but in practice the acronym is always used as the name.

Matthew Weatherley-White, courtesy of The CAPROCK Group

Matthew Weatherley-White, courtesy of The CAPROCK Group

Weatherley-White explains the problem he sees in the investment community. “In impact investing, there is no common language nor framework to communicate between entrepreneurs and asset managers and investors. As a result, confusion and skepticism (not to mention unnecessary resource consumption) undermine confident capital flows, hurting the entire impact investing ecosystem.”

The iPAR project began with Weatherley-White developing an algorithm for assigning an impact score to an investment. That was seven years ago. “We have spent seven years working on an intuitive, interactive impact assessment and reporting platform/framework : iPAR. iPAR is based on the robust IRIS catalogue and GIIRS ratings, and is designed to incorporate impact data from any source. As such, it supports the consistent communication of impact up and down the impact financial chain, bringing transparency and, eventually, accountability to the impact investing eco-system.”

Weatherley-White gave me a test drive of the system and it is brilliantly easy to use and is available for free. The firm’s clients will get access to more layers of data than the general public. One limitation of the system is that it is based on publicly available information.

That information tends to be best seen at the fund level of investment. Funds publish their objectives readily. Less often do they publish impact reports that give investors a clear indication of their impact performance. Finally, there is very limited data available at the social enterprise level.

Weatherley-White acknowledges challenges. “We face three main challenges: business models that are based on classification proliferation, limited consensus on an what an organizing framework should look like and include, and the vague sense that ‘I’ll know impact when I see it,’ thus resisting attempts to construct a unifying, harmonizing framework.”

He is confident that the new tool addresses these concerns. “We believe that iPAR addresses each of these forces, as well as a wide range of second-order issues and concerns, such as ‘impact execution risk,’ ‘thematic orientation,’ etc.”

The tool has limitations, but those appear to be endemic in the industry. Weatherley-White says, “The biggest limitation of our solution (although it permeates the entire discipline) is the lack of auditability that plagues any system that depends on self-reporting. Equally limiting is the above referenced comment on competing interests.”

He notes that the traditional investing world struggled with access to quality information about financial returns in the early days of public markets. “Imagine what the world of conventional investing was like before GICS, the Russell Indices, Morgningstar and FASB. Chaos. We believe that iPAR is one part of the larger solution set around standardizing and professionalizing impact investing reporting.”

In simplest terms, Weatherley-White says, “iPAR is nothing more than a communication layer between those who are actually impacting the world for good and those who are funding those activities.”

Ultimately, iPAR appears poised to become a key part of the solution to impact measurement and reporting. ”So we must own the narrowness of our role, while at the same time recognizing that the pain point we solve is real and practical,” Weatherley-White concludes.

On Thursday, June 2, 2016 at 2:00 Eastern, Weatherley-White will join me for a live discussion about iPAR and its potential to address the gap in information available for measuring the impact in impact investing. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

Lighting Up African Communities With Impact Investment For Clean Energy

This is a guest post from Dr Murray Simpson, CEO, INTASAVE Energy

Access to power is still a major challenge for remote rural off-grid communities in Africa and elsewhere. In Kenya, for example, more than 30 million people are without electricity, approximately 75% of the population.

The provision of a reliable, sustainable, clean energy source has wide-ranging benefits, helping to improve health, increase children’s educational attainment, empower women, boost the economy and therefore improve quality of life for entire communities.

One of the simplest and cost-most effective ways of providing this is through solar power, especially in countries with the right prevailing conditions. Kenya, for example, is well suited to solar, with an average of 5 kWh/m²/day (1,850 kWh/m²/year) available throughout the country.

In the past, the standard solution for off-grid solar power has been through standalone solar home systems (SHS) that supply a fixed amount of energy to single households. Although these systems have achieved some success, they have significant limitations including their high cost, limited functionality and lack of community benefits.

A better model is required for delivering sustainable clean energy that is affordable, easy to maintain and scalable. To address this need INTASAVE Energy has created a unique model through its Solar Nano-Grid (SONG) renewable energy systems.

INTA_SolarHubBuildingKenya

SONGs differ from other solar installations as they combine a visionary model for sustainable affordable energy with a cutting-edge new form of energy storage using up-cycled batteries, never used in development projects before. This unique combination not only provides a “quick fix” for immediate electricity needs (both domestic and communal), but also a long-term scalable solution that allows communities to grow their electricity usage at their own pace.

Each SONG consists of a small grid network and central solar hub that produces a DC power output of 3-5 kWp. The hub contains traditional lead-acid cells that store the power collected from the solar panels. Household energy is then supplied via portable battery packs charged at the central hub, collected for use in homes and returned for re-charging as required. A SONG can supply an entire community of around 50 households from one central hub.

Ground-breaking IonQube technology allows industry standard 18650 lithium-ion batteries, as used in laptops and power drills, to be ‘upcycled’ into a rechargeable and long-lasting power source for low carbon energy storage. By monitoring and analysing how power is being used with microcontrollers in the battery packs in initial installations, INTASAVE is able to expand and increase supply to meet individual and community requirements for existing and future roll-outs.

One of the key benefits of the SONG model is that excess power generated at the central location is available to meet the community’s commercial, social or agro-industrial needs, which is not possible with an SHS. It can power water pumps, flour mills and egg incubators, and even support commercial micro-enterprises such as hair clipping and mobile phone charging businesses. INTASAVE Energy is working with the SONG communities to help grow new businesses, creating much-needed jobs and income for long-term development.

The first INTASAVE Energy SONG deployments are currently taking place in Kenya. INTASAVE Energy has also launched a major $30 million equity funding campaign to enable the wider implementation of the SONG programme. Details can be found here or contact admin@intasave-caribsave.org.

About Dr Murray Simpson:

Dr Murray Simpson is senior visiting fellow, University of Oxford, Department of Engineering Science and CEO of the INTASAVE-CARIBSAVE Group, a global not-for-profit and environmental enterprise organisation with offices in Africa, Asia, the Caribbean, China and the UK, specialising in sustainable development and climate change adaptation and mitigation in developed and developing countries, and in emerging economies.

Village Capital Works To Scale Social Ventures – Here’s How

This post was originally produced for Forbes.

As I’ve been covering social entrepreneurship and impact investing for the past several years here, I’ve watched and come to know Village Capital as one of the real leaders in social entrepreneurship. Their peer-selected investment model is unique among the accelerators and incubators I’ve covered. Last week, Village Capital announced the formation of VilCap Communities, an effort to radically expand the peer-selected model.

Ross Baird, Executive Director, is on a mission. Last week, he published a piece that was highly critical of the Silicon Valley model for venture finance. Afterward, he told me, “The way we fund new ideas today is broken–we send billions of dollars to a few people in a few well-off cities, who fund people they know and who are in their networks. As a result, 78% of venture capital is distributed to just three states – California, Massachusetts and New York – and only 5% goes to women founders, and less than 3% to people of color. And the people solving problems in society don’t have lived experience with most of the problems they are trying to solve.”

Village Capital’s innovation is the principle of peer selection. When they bring a cohort of entrepreneurs into their programs, those entrepreneurs ultimately decide who gets the money. The Village Capital team serves only to facilitate training and collaboration. ”Village Capital’s peer selected investment model changes the power dynamic between people with ideas and people with capital. It’s no longer well-resourced people sitting under fluorescent lights who don’t understand the problems they are trying to solve deciding who gets a shot; instead, entrepreneurs everywhere can get opportunity, if they can convince their peers,” Baird says.

Having been invited to watch the process first hand, it is interesting to see entrepreneurs compete and collaborate in an environment where their peers will ultimately decide their investment fate. “Peer selected investment upends the power dynamics of traditional early-stage venture capital, by placing investment decisions in the hands of entrepreneurs (Village Capital provides the first funding in two-thirds of investments). The process also democratizes venture capital by making capital more accessible to anyone solving major global problems, no matter their race, ethnicity, zip code or background,” he adds.

Baird hopes to expand the use of peer selection beyond the accelerator-type cohorts they’ve been hosting. “The purpose of VilCap Communities is to reinvent the way we invest capital in our society by spreading the vision of democratized entrepreneurship, enabling peer selection everywhere. This past weekend, we gathered over 350 people in Salt Lake City – including entrepreneur support organizations and investors representing 16 communities across the United States. The 16 pioneer communities have committed over $1 million collectively in local companies through peer-selection. The weekend was a chance for these communities to interact, network with investors and stakeholders from around the country, including Steve Case, and learn about peer-selection.”

Baird is working to empower communities around the country to invest for impact using the VilCap model. “The goal of VilCap Communities is to unlock capital for communities outside the major venture capital centers. Entrepreneurs in these communities are solving real-world problems – like health, education, water sustainability and advances in agriculture. For example, Baltimore is well-positioned to support entrepreneurs solving challenges in Health, thanks to the presence of Johns Hopkins University backing startups through its venture fund and a broader ecosystem that can help entrepreneurs scale.”

Village Capital is focused on supporting mission-driven entrepreneurs who have the potential to scale large businesses. “All our companies believe that their purpose is a competitive advantage. For example, WiseBanyan, which brings investing ability to the majority of the world that has no investment income, believes that their focus on financial inclusion gives them a competitive advantage over the big banks, and Kickboard, an education technology company that helps measure data to improve student performance, believes that superior impact assessment increases revenue. Our partners believe in our purpose, increasing the likelihood that they will fund our operations and become great investors in our companies.”

Village Capital is a social venture itself, with a variety of revenue models helping it to be self-sustaining. ”Village Capital has two core activities: programs and our investment fund. For our programs, partners who believe that entrepreneurs can create impact provide sponsorships and contributions to back our activities. Program partners such as PayPal, our global fintech partner, believe that they can gain unparalleled insights into new innovation from entrepreneurs, and exceptional engagement opportunities for their employees. For our fund, Village Capital charges investors management fees on assets under management, which makes the administrative team operating the fund self-sustainable,” Baird concludes.

On Thursday, March 24, 2016 at 2:00 Eastern, Baird will join me for a live discussion about their effort to put entrepreneurs in the venture fund’s seat. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.

More about Village Capital:

Twitter: @villagecapital

Village Capital sources, trains and invests in seed-stage entrepreneurs with business solutions to major global problems. Village Capital recruits entrepreneurs solving specific problems in agriculture, energy, education, financial inclusion, and health, and then puts the power of investment in the hands of the entrepreneurs, who award the prize investments to the two ventures ranked highest by their peers at the end of every program. The organization supports early-stage ventures through a 501c3 nonprofit operating training programs for founders, investors, and communities, as well as through an affiliated, for-profit investment fund providing early-stage capital to top-ranked ventures of each program.

Baird’s bio:

Twitter: @rossbaird

Ross Baird has been at the forefront of the changing world of entrepreneurship, as a member of the founding team of ten enterprises since he started college. Ross developed Village Capital, the firm he runs, in 2009, and leads the development of an organization that has supported over 600 enterprises on six continents, as well as the world’s first peer-selected venture fund. The core innovation of Village Capital, peer-selected investment, won the MPrize from HBR and McKinsey for a top top management innovation of the year.

Ross has an MPhil from the University of Oxford, where he was a Marshall Scholar, and a BA from the University of Virginia, where he was a Truman Scholar and a Jefferson Scholar.

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