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Winter Innovation Summit: A Quick Report

Impact investors and government leaders from around the world convened in Salt Lake City at the Winter Innovation Summit hosted by the Sorenson Impact Center to focus on the ways that data can be used to inform both investments and government spending.

Jeremy Keele, President & CEO of Sorenson Impact, said, “The central theme of Sorenson Impact and the event itself is to explore how data, evidence, and innovation can be leveraged to solve difficult social problems like homelessness, chronic unemployment, incarceration, and poverty.”

Government leaders, including both Utah Governor Gary Herbert and US Congressman John Delaney of Maryland, address the conference.

Former CNN anchor and current social entrepreneur, Soledad O’Brien, New York Times columnist David Bornstein, and Academy Award-winning filmmaker were featured in a discussion about the role of media in creating social impact.

Salt Lake County Mayor Ben McAdams spoke at the conference. Salt Lake County, under his leadership, has successfully completed a second Pay For Success financing to reduce recidivism and homelessness in the County. The deal involves the County paying for services only if key results are achieved by providers. The providers, in turn, are paid by investors expecting that the results will meet the County’s requirements for a full payout.

DC Water and the Nation's First Environmental Impact Bond with Eric Letsinger (moderator), Beth Bafford, George Hawkins, photo by Decker Rolph

DC Water and the Nation’s First Environmental Impact Bond with Eric Letsinger (moderator), Beth Bafford, George Hawkins, photo by Decker Rolph

Eric Letsinger, founder of Quantified Ventures, George Hawkins and CEO and General Manager of the District of Columbia Water and Sewer Authority (DC Water), and Beth Bafford, Director of Investment at the Calvert Foundation, explained the structure and process for creating the world’s first Environmental Impact Bond. The Pay For Success program provided $25 million of financing to create “green infrastructure” to prevent sewer backups during rain storms. The deal was also unusual in that the payor and the provider are the same entity, creating a moral hazard that had to be managed; the payor/provider only has to pay back the money if the intervention works. They note that they will, however, be strictly required by contracts to do the work, even if it isn’t effective, mitigating the moral hazard.

Pay For Success financings, also called Social Impact Bonds, require the use of objectively obtained and evaluated data on outcomes–not outputs. This data discipline is required for PFS transactions. That same discipline is beginning to spread throughout government social programs and impact investments.

One of the challenges discussed at the conference is the threat that the Trump administration will limit access to data rather than expand it. Linda Gibbs, Principal at Bloomberg Associates, an international philanthropic consultancy, virtually shouted, “Data is a public good!” She made the case that data should be generally available to the public except when there is a compelling reason to keep it private.”

A relatively new field within impact investing is gender lens investing. Jackie Zehner, President of The Jacquelyn and Gregory Zehner Foundation; Jackie VanderBrug, Managing Director, U.S. Trust, Bank of America Corp.; and Robyn Scott, co-founder and CEO of Apolitical, made the case for investing after measuring the number and proportion of women employees, managers and board members. They presented data that suggests that this approach to investing improves returns.

Much more happened at the Summit than can be covered here in a short story. Watch for follow-up pieces here and at Forbes.com.

 

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