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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.
Crowdfunding for Social Good
Devin D. Thorpe
Devin Thorpe

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.

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If Billionaires Are A Cause Of Climate Change, Social Entrepreneurs Are A Solution

This post was originally produced for Forbes.

GQ’s Luke Darby’s article, “Billionaires Are the Leading Cause of Climate Change,” makes the compelling point that 100 corporations produce 70% of the global greenhouse gas or GHG emissions.

Upon reading that, the first thought that comes to my mind is that climate change should be easy to address, simply because only 100 boardrooms need be convinced to change their ways. Darby argues it won’t be so easy.

Next, I think that corporations have zero incentive to produce GHGs unless consumers are buying up products derived from or requiring emission of GHGs. GM presumably sells lots of Suburbans that get only 15 miles per gallon in the city because people buy them. There is an easy way for us to stop GM from producing Suburbans—stop buying them.

And, let’s note, that a Suburban carrying eight people on a long road trip where the massive vehicle impressively logs 22 miles per gallon is arguably more efficient per passenger (about 176 miles per gallon per person) than my electric Nissan Leaf when I’m driving it alone (99 MPGe on average).

Oil rigs CREDIT: DEPOSITPHOTOS

Still, the argument that powerful corporations could do more than they are to reduce GHG emissions is almost undeniable. The argument—and we need to have it—should be how much more and how quickly should they do more. Such an argument falls outside my Forbes-sanctioned “swim lane” so look to someone else to lead that discussion.

Darby points out that we have only about 12 years “to prevent the worst, most catastrophic elements of [climate change] from wreaking havoc on the world’s population.” He may be right that gambling on large companies to move quickly enough to address these problems is betting against the house.

Instead, I wish to make the point that Harvard’s Clayton Christensen explained more than 20 years ago what is likely to happen in his seminal work, The Innovator’s Dilemma. Startups will innovate and displace behemoths that fail to do so—and real innovation within the massive organization of a large corporation is painfully difficult.

Ford still has a market capitalization of $31.4 billion as I write this. GM’s is even larger at $46.55 billion. Tesla, however, is still larger still at $54.2 billion, despite producing a small fraction of the cars produced by the U.S. auto giants. We seem to be watching the feature film version of The Innovator’s Dilemma playing out in a sort of real-time slow motion. (Full disclosure: I own 60 shares of Tesla).

If Christensen is to be believed, over the next 25 to 30 years, we can expect to see a complete replacement of some of the world’s largest companies, especially those tied to high GHG emissions, like oil and gas companies and some players in the auto industry. While most if not all of them are making investments in clean energy, the dilemma they face between profiting from their legacy businesses and innovating their replacements could be too great for them to succeed.

At the same time, startups with nothing invested and nothing to lose in the production of GHGs, can innovate around them. It will be billionaires who provide at least some of the funding for these startups, providing the economic fuel for their success.

For an example you’re less likely to recognize, Renewlogy is a startup based in Salt Lake City that converts even the lowest quality plastics, including both high-quality plastics that have been degraded by floating in the ocean for years and low-quality plastics like grocery bags that typically aren’t recycled into either diesel fuel or the raw material for food-grade plastic.

Innovation in the renewable energy space is certainly more than I can keep pace with, but I’ve written about solar energy advancements in almost every phase of their design, production, distribution, installation and operation.

Wind energy is already the cheapest source of electricity (but without batteries can’t yet be relied upon for baseload power to the grid). GE, it should be noted, has helped lead innovation in wind turbines and is a major producer—proving that all is not lost for the incumbents.

There are startups in the wind-power arena who are working on affordable rooftop and backyard turbines that could work alongside or in place of rooftop solar where there is too little sun.

Since he published The Innovator’s Dilemma in 1997, much of Christensen’s work has been focused on helping large companies innovate. I hope the 100 big GHG emitters Darby mentioned have Christensen on retainer. They’re going to need him.

In the meantime, I will look to social entrepreneurs to lead the innovations that will solve climate change. Remember, we don’t have to solve climate change with yesterday’s technology or even today’s. The financial incentives have never been bigger. You can count on entrepreneurs and inventors to keep right on innovating in 2019 and beyond—and there is no bureaucracy preventing them from succeeding.


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Matt Damon’s Water Charity Takes Impact Investing Plunge

This post was originally produced for Forbes.

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

Water.org, the nonprofit resulting from the 2009 merger of Matt Damon’s H2O Africa and Gary White’s WaterPartners, has completed an $11 million impact investing pilot project and has already closed on $33 million in a new fund that they hope will reach $50 million.

The transition from an entirely philanthropic approach built around drilling wells and building toilets to an investment model is motivated by a desire to reach more people, White, 55, the CEO says. “Frustration with the pace of our impact led me to try something entirely new.”

The resulting model does not require Water.org—or WaterEquity, the new entity it formed to make and receive water, sanitation and hygiene or WASH-related impact investments—to make individual loans to consumers in their target markets. Instead, WaterEquity provides investment capital to microfinance companies that provide loans to low-income consumers at affordable rates for WASH upgrades in their homes.

Matt Damon contemplates a question at a press conference at Sundance, January 23, 2016, by Devin Thorpe CREDIT: DEVIN THORPE

The program has demonstrated a 99% repayment rate, White says. Together with interest on the repaid loans, the pilot fund has already begun making distributions to investors of 3.6%, which White describes as “higher than expected.”

Be sure to watch the full interview in the player at the top of the article to hear the story of the merger of White’s WaterPartners with Damon’s H2O Africa.

The pilot fund helped 320,000 people in India gain access to clean water or sanitation. He also notes that 99% of the people directly supported by the investments are women and 77% earn less than $4 per day.

The new fund will operate in India, Indonesia, Cambodia and the Philippines. The fund had a first close in August with investors including Bank of America, the Overseas Private Investment Corporation (OPIC), Ceniarth LLC, Niagara Bottling as well as the Conrad N. Hilton, Skoll and Osprey Foundations. White notes that Damon is also an investor in the fund.

“The Foundation was an early investor in both WaterCredit Funds and strongly believes that market-based solutions will be vital to achieving Sustainable Development Goal 6 given the scale of investment required,” says the Hilton Foundation’s senior program officer Chris Dunston, who is responsible for its safe water strategy.

Dunston notes that the Foundation continues to make grants in support of Water.org’s work in Ethiopia and Uganda and is considering additional grants for Ghana as well.

“By leveraging consumer credit to drive investment in WASH infrastructure, Water.org and Water Equity have been able to dramatically scale the number of people their program reaches,” Dunston says. “This will likely play a major role in making progress towards Sustainable Development Goal 6 given the scale of investment required to reach universal access.”

Water.org CEO, Gary White CREDIT: DEVIN THORPE

White explains that the investment model, which recycles money as each consumer repays a loan, allowing the same money to help many people in sequence, has accelerated Water.org’s work. Over ten years, he says, the lending model allows the organization to help five to ten times as many people as grants allow.

“It took Water.org about 20 years to reach one million people through the traditional approach of digging wells and installing toilets. We are now reaching over one million people a quarter,” White says.

The $33 million from the August closing have already begun to be deployed to further accelerate the work. An investment in a Cambodia micro-lender was made this fall and two other investments are expected to close this year. Those three investments should yield 100,000 microloans, White says. WaterEquity has raised another $15 million recently, bringing the total raised to $48 million.

Target is another investor in Water.org, helping with that acceleration. Target views the investment as part of its role in serving communities where products sold in its stores are produced.

Target’s Jennifer Silberman, vice president for corporate responsibility, says, “At Target, we believe that clean, drinkable water and sanitation are human rights and should be accessible for all. For millions around the world, access to funds stands between them and safe water in their homes.”

“What we’ve done,” White says, “is create a system where the poor can now meet us halfway. We don’t have to raise a trillion dollars–which is what it would take in charity to solve this crisis. We can use that philanthropy catalytically and leverage this capital from the bottom up.”


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How Investing In Regenerative Agriculture Can Help Stem Climate Change Profitably

This post was originally produced for Forbes.

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

Investing in regenerative agriculture has the potential to address not only the food supply but also climate change, peace and conflict resolution and the water supply to boot. This impact investing strategy could be the biggest lever for creating positive change available to investors today. It also appears to generate healthy financial returns.

Craig Wichner, 49, founder and managing partner for Farmland LP, a fund manager that invests in converting conventional farmland to regenerative, organic farming. “It has so many benefits to the environment, to human society,” he says. “But we’re also demonstrating that you can grow a great, healthy, wonderful food and be more profitable than conventional agriculture systems.”

Farmland LP acquires traditionally managed farmland, typically used to produce commodity crops and converts it to organic using regenerative practices. Wichner reports generating gross margins of 40 to 50% on wine grapes. Margins hover around single digits for conventionally-grown commodity crops, which is why the firm works to convert its farms to other crops. He notes that returns during the three-year organic conversion period are lower.

Craig Wichner CREDIT: FARMLAND LP

David LeZaks, 37, leads regenerative food systems projects for Delta Institute, a nonprofit that has worked to identify market-based solutions to environmental, social and economic problems for the past 20 years.

Watch the full interview with Wichner and LeZaks in the video player at the top of the article.

LeZaks, who holds a Ph.D. in Environmental Resources and collaborates with Farmland LP, describes his work this way: “I design disruptive infrastructure that positions us to unlock substantial capital flows into the regenerative agriculture sector.”

“With the current system that focuses on growing more cheap food, we face a dire situation that intensifies the degradation of critical farmland,” he says. “Recent evidence demonstrates that by re-orienting capital and the institutions and people that move capital, we can reverse farmland degradation and build regenerative food systems that undo much of the damage that has been done over the past century.”

Kari Cohen, projects branch chief for the Financial Assistance Programs Division at USDA’s Natural Resources Conservation Service (NRCS), notes that Delta Institute was awarded a Conservation Innovation Grant in 2017 to help drive market-based solutions in resource conservation.

“The Delta Institute project, a part of this conservation finance cohort, is developing a regenerative agriculture investment toolkit,” he says. “Regenerative agriculture is a farming system that goes beyond ‘sustainable’ and aims to improve natural resource conditions in conjunction with agricultural production.”

Carbon and Climate Change

Wichner explains how farming contributes to climate change. “The current agriculture system, the chemical-based agriculture system, is really geared around growing these commodity crops planting annual crops year after year after year that essentially degrades and burn down the carbon in the soil and the nutrients in the soil.”

In contrast, regenerative agriculture increases carbon sequestration in the soil. “When you switch to a slightly more complex form of agriculture you… actually find that you can increase the carbon in the soil, increase the overall health of the soil, increase its biological activity. It’s not just dead soil anymore; it becomes nice and vital and you actually get increased crop production,” he explains.

While Farmland LP focuses on converting farms from commodity crops to higher value products, the principles of regenerative agriculture can be applied to commodity crops, too. LeZaks notes, “As an example, in a study published last year (attached) that looked at “conventional” compared to “regenerative” corn production, the farms in the study yielded less, but were more profitable.”

Peace and Conflict Resolution

Scarce resources contribute to the risk of conflict. Traditional agricultural practices contribute to desertification, according to Johanna Walderdorff, vice president of Growth for Peace Organization. “The loss of habitable land will force people to relocate in search for more fruitful land. As they move towards vegetated areas, there are usually people who already own that particular land,” she says. The movement of people can lead to conflicts.

Regenerative agriculture helps to fight desertification and can help to keep people on their traditional land. “Working on the soil is the first step, and therefore the baseline for us to work with nature, anything else comes after. This is what regenerative agriculture does,” she adds.

David LeZaks CREDIT: DELTA INSTITUTE

Water Supply

Unhealthy soil requires more water to produce the same amount of food. Healthy soil, in contrast, resulting from regenerative agricultural practices holds more water and requires less be added.

Furthermore, all organic agriculture omits the use of chemical fertilizers and pesticides, eliminating any risk—however small—of excess fertilizers contaminating rivers or of pesticides or herbicides fouling drinking water.

As a side note, the report LeZaks cited above also showed that regenerative, insecticide-free farms that “proactively design pest-resilient food systems” have one-tenth the observed number of pests as the insecticide-treated crops on conventional farms.

Financial Returns

Ricardo J. Salvador, director and senior scientist, food & environment program at the Union of Concerned Scientists, says he grew up using regenerative agricultural practices. It was the way his family in southern Mexico traditionally farmed. He didn’t learn another approach until he got to college at New Mexico State University in 1976.

He explains how Farmland LP generates financial returns from his perspective as a soil scientist.

Their business model is predicated on improving the value of the asset they manage for their investors. It was unique at the time they started to interpret this as improving the quality of soil (organic matter content, fertility, water holding capacity, biodiversity.) A recent study demonstrates that inside of a decade of taking over management of their properties all of these characteristics (and several others measuring total system productivity, resilience and profitability) improved markedly. From study of this report, observation of their evolving business, and direct conversations with their technical staff, it is clear to me that they are superb agronomic managers.

The USDA’s Cohen explains how LeZaks’ work at Delta Institute contributes to financial returns. “The Delta Institute’s project is designed to increase investment in regenerative agriculture. Regenerative agriculture systems have the potential to increase financial returns to landowners and investors through higher yields, more resilient operations, certification marketing, and the sale of ecosystem services credits such as carbon credits.”

Mark Gogolewski, the CEO of Realization Films, is an investor in Farmland LP, which has a total of $160 million under management, including 15,000 acres of farmland. He says, “They have significantly raised the value of all of the acquisitions.”

He notes, however, that he gets satisfaction from seeing the land converted to a regenerative approach. “Farmland has found a recipe for success that also delivers real good. How often do you get to say that?”

“I was looking at farmland because I believe in owning real assets. I had and have a strong belief that farming remains as one of the most important assets in our country and our world,” Gogolewski notes. “Plus, these assets can and should be managed far, far better for both optimizing economic activity, while being a strong steward to the long-term value of this key environmental asset.”

Growth for Peace Organization’s Walderdorff argues for changing our perspective. “We speak of trees because they are high, we talk about rising ocean levels because it’s visual, but desertification has been gradual, and the microorganisms are underneath the soil, and thus have been ignored. Our survival depends on the survival of the smallest organisms on the planet. ”


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Mission To Serve ‘Poor And Vulnerable’ Guides This Health Care Impact Investment Fund

This post was originally produced for Forbes.

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

Nonprofit Providence St. Joseph Health, the third largest health care system in the United States, traces its roots back to the Sisters of Providence and the Sisters of t. Joseph of Orange. Their missions were to serve all members of their communities, “especially the poor and vulnerable,” says Aaron Martin, 49, executive vice president and chief digital officer. That motivation now guides the system’s $150 million health care impact investment fund.

Martin, who had no health care experience before joining Providence, now leads its efforts to improve health outcomes and improve service levels using technology. Investments are made via Providence Ventures, a fund created by the parent and funded entirely by it to accelerate the digital mission. Watch the full interview with Martin in the video player at the top of this article.

So far, the fund has invested in 13 companies, two of which were Providence innovations that are being spun out in hopes that they will grow more quickly and benefit not only Providence but all health care providers.

Aaron Martin CREDIT: OSJH

Venrock, which raised $450 million in its latest fund, has co-invested with Providence Ventures on two companies: Kyruus and Lyra Health. Venrock partner Bryan Roberts says, “Aaron is terrific; he has the knowledge of a technology and growth savvy operator with the scale of a health system at his disposal. This allows him to bring a new lens to the change-resistant, defensive technology approach of the healthcare industry while still being grounded in the current practices and having a large sandbox in which to pressure test these new ideas.”

Martin’s background is with Amazon and McKinsey & Company and was a founder of two tech companies. At Amazon, he led the self-publishing and print on demand business and then the Kindle North American Trade Publisher business. This background helps him see opportunities to scale with the operational aptitude to do so.

“Driving innovation at scale means going digital – having customers engage and transact online with us,” he says. “In health care today, consumers transact and engage with health systems in a very limited manner. Therefore, in order to create change we must deliver a better online experience as compared to offline. In fact, this experience has to be 10 times better than what consumers are used to experiencing offline in order to entice them to work with us online.”

“We’re working to bring health care into the digital and consumer age to better serve patients and consumers – with a focus on the poor and vulnerable – delivering care on their terms: where, when and how they want it,” he adds.

There are six areas of focus that Martin identifies:

  1. Access and personalization
  2. Simplifying care
  3. Making caregiving easier
  4. Better serve Medicaid patients
  5. Power behavioral health
  6. Enable new revenue streams

Of the 13 investments made so far, Martin describes 11 as “best of breed” that “we went out and found.” The other two were “invented” at Providence.

Providence operates in Alaska, California, Montana, New Mexico, Oregon, Texas and Washington, with $23.2 billion in 2017 revenue. “All profits go back into the system to serve our nonprofit mission,” he says. The $150 million investment in Providence Ventures came from the parent’s balance sheet.

Part of that $150 million was invested in Kyruus, which solves a problem that Martin suggests is much bigger than people expect: knowing which providers work for your hospital. When patients need to see a specialist, Kyruus helps other doctors and providers in the system as well as the patients when searching online to find the relevant physicians to get the care they need.

Funding also went to Xealth, a Providence unit that enabled physicians to prescribe digital products, from a Lyft ride to online training and education, to help patients get the care they need. By using the same process they use to prescribe meds, to prescribe digital care, the doctors are able to be more helpful to their patients and improve health outcomes.

Martin takes pride in this effort. He points out that even if the fund is quite successful and doubles in value over a decade, the financial impact will be relatively modest to such a large organization. What he really wants is to move the needle on patient care.


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Why Social Entrepreneurs and Impact Investors Should Vote

This post was originally produced for Forbes.

Everyone should vote.

Today, I’m going to make the case for why social entrepreneurs and impact investors should. None of these reasons are intended to excuse anyone from engaging in this civic activity that is equal parts privilege and duty.

Fundamentally, government at all levels from the local school board to the White House (and, yes, I understand that as I write this immediately preceding the mid-term elections the president is not on the ballot) impacts the work we care about, devote our lives to and invest in.

The U.N. Sustainable Development Goals provide a list of 17 issues that draw the attention of social entrepreneurs and impact investors. These issues are all impacted by governments as much as by the efforts of entrepreneurs and investors. As you consider each vote you cast, weigh how it will impact these 17 areas:

  • Goal 1: No poverty
  • Goal 2: Zero hunger
  • Goal 3: Good health and well-being
  • Goal 4: Quality education
  • Goal 5: Gender equity
  • Goal 6: Clean water and sanitation
  • Goal 7: Affordable and clean energy
  • Goal 8: Decent work and economic growth
  • Goal 9: Industry, innovation and infrastructure
  • Goal 10: Reduced inequalities
  • Goal 11: Sustainable cities and communities
  • Goal 12: Responsible production and consumption
  • Goal 13: Climate action
  • Goal 14: Life below water
  • Goal 15: Life on land
  • Goal 16: Peace, justice and strong institutions
  • Goal 17: Partnerships for the goals

UN Sustainable Development Goals CREDIT: UN

It is tempting to assume that none of these goals relates to the United States, that these are developing world goals not relevant to wealthy America. Many in Flint, Michigan would argue that Goal 6: Clean water and sanitation is perfectly relevant.

Women tweeting the hashtag #metoo are arguing that Goal 5: Gender equity is a primary voting issue in America. Similarly, those in the #blacklivesmatter movement are reminding us that Goal 10: Reduced inequalities is as much a future discussion as a past one in America.

President Trump himself has made clear that discussions about America’s responsibility to address Goal 13: Climate action are topical. Similarly, environmental regulation is undergoing a change with the current leadership in the White House and EPA, suggesting that goals 14 and 15 Life below water and Life on land are also timely.

Social entrepreneurs and impact investors are leading efforts at deploying more renewable energy, from rooftop solar to utility-scale wind farms. A future of cheap and clean energy seems almost assured, but to ignore the government’s hand in the transition is laughable. Goal 7 is as urgent in the developed world as it is in the developing world.

It would be disingenuous to argue that these goals align perfectly with any political party. Goal 8: Decent work and economic growth highlights the tension implicit in the SDGs. What most struggling people want more than anything is a job–or a better job. There is a genuine risk that some well-intended efforts to ensure the dignity and safety of work can have the effect of reducing jobs at the margin. Still, work conditions and wages for some even in the United States are not acceptable. The government has a role in ensuring a healthy balance.

Anyone who claims to care about any of the SDGs, but especially those who are working to solve these problems as entrepreneurs and investors, should take the time to thoughtfully consider the impact of every vote cast on each one of the 17 goals.


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Is Impact Investing Attempting To Solve Problems Using The Tools That Created Them?

This post was originally produced for Forbes.

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

Jed Emerson, 59, widely recognized in the impact investing community, recently published a new book, The Purpose of Capital: Elements of Impact, Financial Flows and Natural Being, that calls into question some of the fundamental precepts of the movement, the very underpinnings of capitalism.

Impact investors seek to solve social problems from poverty to climate change by making investments that will not only mitigate the ills but will provide a financial return.

Early in his book, Emerson observes, “There is a central challenge in this effort to ‘do well and do good’ in that at its core is a commitment to making use of the very financial tools that have failed to create a just, equitable and sustainable world in the pursuit of creating a more just, equitable and sustainable world.”

He’s suggesting we may be treating burn victims with fire because we depend on the light it provides. He may also be questioning our sanity by suggesting we’re hoping to solve a problem by continuing to do much the same thing that created it.

Jed Emerson CREDIT: RALPH REUTIMANN

He goes on to reject the notion that markets are amoral, objective and rational. Commenting on the book, he says, people who argue for the rational behavior of markets will quickly admit that they are moved principally by fear and greed. “Those to me are fundamentally social dynamics and issues.”

Emerson is no communist. His firm, Blended Value Group, works with ultra-high net work families to manage their money, often with an impact focus. He has twice been selected by the NonProfit Times as one of the 50 most influential people in the sector.

“Those who know Jed and have read his large body of work know that he is the creator of the term ‘blended value’ that helped define the intermingled goals of impact investing,” says Catherine Clark, faculty director, CASE and CASE i3 Initiative on Impact Investing at Duke University. “In this book, Jed adds new ingredients to the purpose blend, a thoughtful and reflective journey into how western political and spiritual thought has intersected with the purposes of capital at an individual and societal level.”

The book differs from Winners Take All by Anand Giridharadas, which addresses some of the same themes. While Giridharadas offers a stirring critique of impact investing, social entrepreneurship and most other efforts to change the world, Emerson’s Purpose of Capital is more introspective. It is almost as if Emerson is talking through the issues for his own benefit as much as ours.

That is one of the lessons of the book that Emerson seems to have learned as much as shared. “I think the most important lesson is the need for us each to come into this process from a place of humility,” he said.

He’s chosen to apply that lesson to the promotion of the book, committing not to give any keynote speeches, choosing instead to only have discussions (like the one he had with me that you can watch in the player at the top of this article.) The book is available for free download here.

Seeking for insights to help people “get to this next place together,” Emerson plans to engage in exchanging ideas “because I have a part of that answer, but I only have a part of that answer. And I think that we’re going to really find the answer by stepping back and be more deliberative and dialogue with each other, which I think is how we come to be in better dialogue with self.


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So, An Impact Investor, A Social Entrepreneur And A Sea Turtle Walk Into A Bar…

This post was originally produced for Forbes.

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

Okay, an impact investor, a social entrepreneur and a sea turtle didn’t literally walk into a bar, but the way their lives intersected is no joke.

Three years ago this week, a Texas A&M marine biologist, Christine Figgener, uploaded a video of her team removing a four-inch plastic straw from the nostril of a sea turtle. The evocative video immediately went viral and now has 32.6 million views on YouTube.

The video not only inspired the current activism around plastic straws that has me carrying around paper straws and a law banning plastic straws in Seattle, but it has people thinking about all single-use plastic more critically. That movement has provided a catalyst for impact investors and social entrepreneurs who have solutions to ocean plastic.

Priyanka Bakaya, the CEO and founder of Renewlogy, a company that uses a chemical process to convert even the worst plastics into fuel and Rob Kaplan, the CEO and founder of Circulate Capital, which launched in July with the specific mission to invest in companies that will reduce the flow of plastic into the world’s oceans, joined me for a wide-ranging conversation about ocean plastic. You can watch the 27-minute interview in the video player at the top of this article.

The Ocean Plastic Problem

The problem of plastic in the ocean isn’t limited to an occasional straw up a turtle’s nose. On its website, Clean Water Action reports:

In the ocean, plastic debris injures and kills fish, seabirds and marine mammals. Marine plastic pollution has impacted at least 267 species worldwide, including 86% of all sea turtle species, 44% of all seabird species and 43% of all marine mammal species. The impacts include fatalities as a result of ingestion, starvation, suffocation, infection, drowning, and entanglement.

In 2010, a California grey whale washed up dead on the shores of the Puget Sound. Autopsies indicated that its stomach contained a pair of pants and a golf ball, more than 20 plastic bags, small towels, duct tape and surgical gloves.

Seabirds that feed on the ocean surface are especially prone to ingesting plastic debris that floats. Adults feed these items to their chicks resulting in detrimental effects on chick growth and survival.8 One study found that approximately 98% of chicks sampled contained plastic and the quantity of plastic being ingested was increasing over time.

The problem is getting worse. Fast. The plastic debris in the Central Pacific Gyre increased five-fold in the ten years ending 2007.

Kaplan notes that this is largely a result of the rapidly growing economies in south and southeast Asia “exponentially” increasing their consumption of plastics without correspondingly increasing their waste and recycling infrastructure.

McKinnley Workman, chief operating officer and co-founder of Lakay Vet, S.A. in Haiti, works to improve waste handling in the Western Hemisphere’s most challenged economy. She says there is a lot of work to do. She explains anecdotally:

Yesterday, I was driving through the city as rain started to fall. It quickly began gushing through the streets and I watched as people made their way into the streets under the rain to dump their buckets or bags of waste. As a poor person, where daily life is a struggle, they gladly watch it wash away with a smile on their face as it’s one less thing they have to worry about. In their minds, they found a free solution to dealing with their waste. Ultimately, all of that water goes straight to the Port-au-Prince bay and eventually makes its way into the worlds global ocean plastic repository.

Workman is cooperating with Bakaya at Renewlogy to deploy the technology there, where all transportation fuel is imported and expensive and single-use plastic that can’t otherwise be recycled for quality reasons is ubiquitous.

Priyanka Bakaya CREDIT: RENEWLOGY

Bakaya points to a study that suggests that at current rates by 2050, there will be “more plastic than fish in our oceans.”

“Ocean plastic presents one of the most urgent and fast-growing ecological and health challenges of our time. Our objective is nothing less than to become the leading force behind solving the capital gaps of companies and infrastructure that prevent ocean plastic,” confirms Kaplan.

The China Ban

Last year, China implemented new restrictions on imported waste plastic for recycling. Previously, 40% of plastic from the United States—and much of the plastic elsewhere—was shipped to China for recycling. The new restrictions constitute an effective ban, Kaplan and Bakaya confirmed. The rules require the plastic to be cleaned at a cost that exceeds the value of the plastic.

“It’s really opening up a lot of local opportunities to find domestic solutions to handle this material,” Bakaya says. One of those solutions is the Renewlogy solution that converts plastic to fuel or the feedstock for virgin plastic.

“There’s no question that China’s ban has is revolutionizing the recycling market globally in many parts of the Western world,” Kaplan says. He notes that any time a company or industry loses 40% of its market, a gaping hole is created.

Demand Side

One of the recycling problems that has developed is a lack of consumer demand for recycled products.

“If there were more consumers interested in using recycled content and choosing those products as part of their shopping experience that would build the market and that would increase the demand,” Kaplan says. “There’s a huge opportunity for consumers to incentivize brands and companies and parts of the supply chain to use more recycled material.”

He adds, “I work with many of the world’s largest brands consumer brands and when we ask them to use more recycled content their initial feedback is, ‘No, our customers aren’t interested in it.’”

“Even if you put all of your plastic in a recycling bin or in a recycling system if there isn’t an end market for it then it will not be reused it will end up either in the environment or in a landfill somewhere,” he says, reiterating his point.

Traditionally, recycled plastics are effectively downcycled. Much of the use of plastic is for food containers. Governments regulate what plastics can come in contact with our food and many recycled products aren’t considered safe. That means that recycled products are typically used in less valuable functions than the source plastics.

Although more expensive and energy intensive than other forms of recycling, by converting plastic into the naphtha to make virgin plastic using the Renewlogy process, consumers don’t have to choose recycled products. Better still, the resulting products aren’t technically recycled and can be used for food and medical purposes, allowing even the worst plastics to be upcycled into the highest value ones.

Kaplan points out that contamination of high-quality plastics is also a problem. After good plastics spend time exposed to the environment on land or in the ocean, they can no longer be recycled into top quality products.

The Renewlogy process, and other similar ones, can convert even contaminated plastics into fuel or plastic feedstock, creating an economic value for low-quality and/or contaminated plastic.

Workman says, “In Haiti, most of the plastic that we see every day in rivers, canals, and streets is this dirty plastic that is difficult to recycle and therefore sticks around to eventually be washed into the oceans.”

“Renewlogy has a great solution that makes sense particularly for Haiti because of the type of plastics found and also because fuel is an extremely expensive and unstable imported resource,” Workman says. She adds that implementation of the Renewlogy technology just in Port-au-Prince could prevent 60,000 metric tons of plastic from flowing into the ocean annually.

One of the reasons the Renewlogy technology holds such appeal for Workman is that it allows for the value-adding process to occur in Haiti, which should reduce imports of fuel and keep more profits in the country.

Technology Is Not the Problem

Both Kaplan and Bakaya point out the technology is not the problem.

Kaplan says:

You know one of the biggest challenges we see is less on the technology side but more on like who’s going to operate this on the ground in Indonesia. Here in the U.S., you’ve got companies that have been operating recycling businesses and waste businesses for decades. We don’t have that in Indonesia, Vietnam and Thailand and India. There isn’t the local expertise and talent that are ready to put that to work in a way that you know is going to be successful. So that’s a big part of our focus is how can we match our financing and capital with technology like Priyanka’s but also with operators on the ground who can execute it.

Workman is trying to address that problem in Haiti. “we have been working with Renewlogy in conjunction with the Plastic Ocean Project to get a pilot system setup at Lakay Vèt.” By partnering with a local recycling company to source plastic that can’t otherwise be recycled, the technology fills an important gap in keeping plastic out of the ocean. The key is to find a responsible recycling partner.

“I will be the first to say that it’s foolish to rely on just a handful of solutions for such a gigantic and multi-faceted problem like this,” she says. She recognizes the need to implement many different solutions to both clean up the mess “we’ve already made” and to prevent further damage to the environment.

Bakaya, for her part, says, “The technology is actually the easy part, and the real challenge is the logistics of both collecting the plastic and getting the end product to the right place.” She adds that with a ready waste plastic supply, Renewlogy’s technology can produce fuels for $30 per barrel.

Getting investors—like Circulate Capital and The Closed Loop Fund—to invest is another constraint she faces.

Partnerships

Circulate Capital could be described as a spinout of Kaplan’s last company, Closed Loop Partners, which does impact investing in recycling domestically. The Ocean Conservancy is also a partner in the new company, along with backing from 3M, American Chemistry Council, The Coca-Cola Company, Kimberly-Clark, Dow, PepsiCo, Partnerships in Environmental Management for the Seas of East Asia, Procter & Gamble and the World Plastics Council.

Diego Donoso, president of Dow Packaging & Specialty Plastics, says, “Circulate Capital is the type of active engagement we need to accelerate the implementation of waste management systems with effective recycling processes that keep plastics waste out of the ocean.”

Ron Gonen, Kaplan’s former partner at the Closed Loop Fund, which the latter previously ran, says, “Circulate Capital is the realization of many months of research and planning on the part of Closed Loop Partners and Ocean Conservancy to design a structure that can dedicate the time and resources necessary to tackle the complexity of the ocean plastic problem at scale.”

Steve Sikra, associate director of corporate R&D and global product stewardship at Procter & Gamble, says, “P&G is proud to be part of the Circulate Capital. Just like the Closed Loop Fund, this will address the root cause and help develop the right infrastructure to drive positive change. Working together, we believe we can halt the flow of plastics into the world’s oceans.”

Ben Jordan, the senior director of global environmental policy at The Coca-Cola Company, says, “We are excited to support Circulate Capital and their aim to prevent the flow of ocean plastic. We aim to be a driver of the circular economy as we continue toward our vision of a world without waste.”

Kaplan says, “Our goal is to remove capital as a barrier.” Bakaya sees capital as a constraint for her business. Perhaps there’s a sea turtle out there that could buy them a drink and help them see how they could solve both their problems.

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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!

This VC Aligns Her Investing With Her ‘Liberal Hippie Roots’

This post was originally produced for Forbes.

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

Cody Nystrom, 35, is a venture capitalist who makes healthcare investments for SJF Ventures where she is a Managing Director. For her, it was important for her work to align with her values.

“I was raised by two hippie parents in a remote area of Alaska about 45 minutes from Fairbanks. They would have probably died at the time if they had been told I would end up in a career in finance,” Nystrom says.

She graduated at the top of her high school class and then from her engineering class at the University of Virginia. Still, she says, “I was a first-generation college student with no idea about professional jobs in the real world.”

Modestly, she says, “I certainly had not been groomed for a career in the financial industry and was pretty rough around the edges, probably still am. Walking and talking a certain way to please others has never been a strong suit and I have a visceral negative reaction to authority, rules and bureaucracy. So by default, I had to become an entrepreneur.”

She did join Ewing Bemiss & Co., an investment bank based in Richmond, Virginia.

“I realized after two years of working in investment banking that if I was going to put in 70 hours a week of work, I better be able to sleep at night knowing that I was making meaningful contributions to society. But instead, I felt unfilled and almost a traitor to my liberal hippie roots.”

She decided to go back to school to earn a master’s in public health. She still remembers growing bacteria in her apartment fridge for a microbiology class. “I have always had a deep personal passion for improving our health care system through a focus on wellness, and particularly through food and nutrition,” she adds.

In her own words:

I joined SJF as an Analyst in 2007, when the firm looked a lot different than it does today. We had just closed our second fund which was only $28 million and had an allied non-profit, where we spent part of our time providing technical assistance to underserved entrepreneurs. Everyone at SJF had to be a scrappy and resourceful back then because we were still proving our returns and impact investing thesis in the market.

When I joined SJF, I thought I would only stay for 2-3 years and then go back to public health grad school. Fortunately, I realized that I could scale my passion for health through the venture capital platform and now lead our Health & Wellness investment practice.

When the firm was founded in 1999, it was a pioneer in the impact space. In fact, the phrase “impact investing” was not yet in wide use. Still, she notes, that despite the growth in the space over the past two decades, “the amount of capital allocated to impact investing is still a drop in the bucket compared to traditional investment vehicles.”

Cody Nystrom, SJF Ventures CREDIT: SJF VENTURES

She doesn’t subscribe to the notion that impact investments should yield lower returns. “SJF Ventures, together with other peer impact managers, is working to prove that one does not need to sacrifice returns in order to feel good about where one is allocating their wealth.”

In fact, she says, “We believe that those companies that are building sustainable products and services that drive positive environmental and social change will actually be among the strongest performers in the current and future economy.”

Chris Nicholson, CEO and co-founder of mPulse Mobile, one of SJF’s portfolio companies, agrees.

“During the investment process we were very impressed with not only their business and market knowledge but their focus on purpose-driven investments – I believe they refer to them as ‘impact investments,’” he says.

Mission compatibility made the investment a good fit, he says. “Our strategies aligned very well because one of our key focus areas is providing access to health care services and information to underserved populations as well as a focus on improving healthcare outcomes through improved dialogue between healthcare entities and consumers.”

SJF makes series A investments in three primary areas:

  1. Energy, environment and sustainability
  2. Health and wellness
  3. Education and employment

While they invest in these areas, she says they look for managers who are truly aligned with the firm’s mission. The firm also looks for companies that have hit an inflection point for growth and typically have over $1 million in annual sales already.

She sees competition for good investments. “There’s no doubt there is a lot of capital out there right now. So, it is a good time to be an entrepreneur. It’s a good time to raise capital.”

Nystrom serves on the board of Solera Heath, one of the firm’s portfolio companies. She excitedly effuses over the potential the company has to stem the epidemic of type 2 diabetes in the United States by providing preventative treatments before patients who are at risk receive a diagnosis and also to help those who do receive a diagnosis to make lifestyle changes to treat the disease.

She notes, “It’s been well documented–many studies, evidence-based medicine–that if someone can lose five to seven percent of their body weight they can reduce their risk of developing diabetes by 60 percent or more.”

That passion to make people’s lives better may have found a surprising home, but 4,000 miles and 20 years from home, she’s still true to the values she learned in Alaska.

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18 Impact Investing Trends You Haven’t Seen Before And 1 You Have

This post was originally produced for Forbes.

Below are 19 trends in the impact investing world that are most likely unknown to you, because they are developing in pockets and corners of the arena where most people don’t have visibility. One or two of these may be familiar to readers who work in the space.

One thing is generally recognized. Impact investing is growing. Quickly.

The Global Impact Investing Network recently estimated that there are $228 billion invested in impact, double the prior year estimate.

The trends observed below hint at opportunities for both impact investors and social entrepreneurs. They also suggest hope for the future.

Stephanie Gripne CREDIT: IMPACT FINANCE CENTER

“Zebras fix what unicorns break,” says Stephanie Gripne, founder and CEO of the Impact Finance Center, suggesting a shift to investing in real solutions rather than fictitious ones. “A new stable of investments: if angels invest in unicorns (10x), and heroes invest in racehorses (10%), what about the catalysts (0%) and champions (-65%)?” She is seeing roles for investors across a spectrum of returns—including negative financial returns for the most philanthropically minded investors.

2.

Dave Richards CREDIT: CAPRIA

Dave Richards, managing partner at Capria, has placed investments around the developing world. He observes, “International ‘airplane investing’ is being replaced with investing via smart, professional, on-the-ground investment teams.”

3.

Cecile Blilious CREDIT: IMPACT FIRST INVESTMENTS

International impact investor Cecile Blilious, founder and managing partner at Impact First Investments, observed two parallel trends—one of which she doesn’t like. “Startups adopting business models serving society without saying the word ‘impact.’ Unwanted trend: funds misusing the word ‘impact’ as a marketing tool.”

4.

Morgan Simon CREDIT: CANDIDE GROUP

“People are becoming more conscious consumers of impact investing,” says Morgan Simon, the founding partner of Candide Group. They are now asking, “Is the impact truly transformative, or just making poverty a little more bearable?”

5.

Thane Kreiner CREDIT: THANE KREINER

Thane Kreiner, Ph.D., executive director of the Miller Center for Social Entrepreneurship, sees “the mobilization of capital to address refugees, migrants, and human trafficking survivors.”

6.

Candace Smith CREDIT: MICROVEST CAPITAL MANAGEMENT

“Digital finance is making it cheaper and quicker to access financial services; key impact investors are ensuring that a deeply ethical approach will be part of any new delivery mechanism,” says Candace Smith, managing director of risk at MicroVest Capital Management.

7.

Matt Davis CREDIT: RENEW LLC

“Impact investing is cutting into philanthropic dollars earmarked for Africa,” notes Matthew Davis, CEO of Renew LLC. He says this is “appropriate for the African economic story that is unfolding.” Finally, he adds, “DAFs [donor advised funds] are becoming an enabling tool for impact investing.”

8.

Daryl Carter CREDIT: AVANATH CAPITAL MANAGEMENT

In the context of “more capital flows into the impact space,” Daryl J. Carter, CEO of Avanath Capital Management, sees three trends. First, increasing capital from “offshore investors,” second, “more focus on housing affordability,” and third, “increased emphasis on impact measurement.”

9.

Ross Baird CREDIT: VILLAGE CAPITAL

Ross Baird, president of Village Capital, notes that “81% of entrepreneurs raise neither venture capital nor get a bank loan.” He adds, “I’m excited to see investors innovating on alternative financing mechanisms for the vast majority of new businesses.”

10.

Mara Bolis CREDIT: OXFAM AMERICA

“Principles to separate impact investing from conventional forms of finance are coming,” says Mara Bolis, a senior advisor at Oxfam America. “They are critical for establishing impact integrity, for building community and reforming how finance behaves.”

11.

Alix Lebec CREDIT: WATEREQUITY

“Water and sanitation is gaining momentum among impact investors,” says Alix Lebec, executive vice president of investor relations at WaterEquity, which is affiliated with Water.org, famously supported by Matt Damon. “According to the Global Impact Investing Network, 42% of investors plan to increase their investments toward this global challenge.”

12.

Samim Abedi CREDIT: WAYVEMEDIA.COM

“The previous sense that investors were OK sacrificing some return to invest in compliant channels has shifted to the expectation that SRI is expected to keep up with or outperform the broader market,” according to Samim Abedi, global head of portfolios at Wahed Invest, a halal investing platform.

13.

Dave Fanger CREDIT: SWELL INVESTING

“Aligning impact investing to the UN Sustainable Development Goals is going to increase in the years ahead,” says Dave Fanger, CEO of Swell Investing. “The goals ensure investors’ dollars work towards solving the world’s greatest challenges.”

14.

Nancy Pfund CREDIT: DBL PARTNERS

“Impact investing: do well by doing good while also protecting nature,” says Nancy Pfund, founder and managing partner of DBL Partners, an early investor in Tesla. “The Muse survey finds workers value access to healthy outdoors.” DBL acted on this trend by investing in “America’s first memorial conservation forest.”

15.

Robert Kaplan, Circulate Capital CREDIT: CLOSED LOOP FUND

“As the world’s attention has focused on plastic pollution and health of the ocean, I see huge impact investing opportunity in the solutions to the root causes,” says Robert Kaplan, CEO of Circulate Capital, which was recently formed to take advantage of this opportunity.

16.

Robert Rubinstein CREDIT: TBLI

Robert Rubinstein, founder and chairman of TBLI Group BV, says, “Public transport infrastructure, community banks, small-scale agriculture and hospitality are major trends.”

17.

Joel Solomon CREDIT: RENEWAL FUNDS

Joel Solomon, co-founding partner at Renewal Funds, sees a trend in “the rising push for funding focused specifically on underserved communities of color and women-led companies.”

18.

Laura Callanan CREDIT: UPSTART CO-LAB

“The creative economy–food, fashion, media, entertainment—is what’s next,” according to Laura Callanan, founding partner of Upstart Co-Lab, which “identified 100 impact funds active in the creative economy.” She says, “We need a Creativity Lens to see what’s there.”

19.

Andrea Armeni,CREDIT: TRANSFORM FINANCE

Andrea Armeni, executive director of Transform Finance, sees “a shift in focus from the what–the product or service itself–to the how: how you create impact via an investment’s structure, its effect on all stakeholders, and for whom wealth is created.”

Each of these trends suggests a profitable lesson for impact investors or social entrepreneurs along with guidance for solving the world’s biggest problems.

Click here to get my free webinar showing the three myths that hamper and the two keys for nonprofit crowdfunding success.


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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!

Now You Can Start Investing With Mission and Purpose for Just $5


Newday Investing has created a new investment firm where you can begin investing with just $5. Not only can you start today with such a tiny balance, you can investing in up to six different mission-driven portfolios that align with the view of the future you’d like to help build.

Interview with Doug Heske, the CEO, and Alex Meek, the president of Newday Investing.

The following is the pre-interview with Doug Heske. Be sure to watch the recorded interview above.

What is the problem you solve and how do you solve it?

Interest in socially responsible or “impact investing” continues to grow: between 2014 and 2016, US assets under professional management using sustainable, socially responsible, and impact strategies grew 33% to reach $8.7 trillion.

This type of investing is especially popular among millennials who are focused on making values-based and socially responsible financial decisions. More than $60 trillion of wealth will be transferred to more than 75 million US-based millennials by 2040 (the global opportunity is even greater as millennials worldwide exceed 2 billion people).

At Newday, we believe that by investing in socially good companies, we can not only generate competitive returns but also drive meaningful change in the way people make their investment decisions. We also believe that socially responsible investing shouldn’t be limited to the very wealthy. We provide affordable, transparent, and easy-to-understand sustainable and responsible investment solutions.

For Newday, investing is as much about education as it is about funding socially responsible organizations. Users can change the world from their pocket by investing in proprietary portfolios with as little as $5. Those who are just beginning to enter the world of impact investing can still use the app without being prompted to invest, using it as a platform to educate themselves, discover new causes to care about, and connect with others who share their values.

More about Newday Investing:

Twitter: @NewdayInvesting

Website: newdayimpact.com

Based in San Francisco, Newday is a technology-enabled asset manager that provides affordable, transparent and easy-to-understand impact investment solutions to the mass market with a minimum investment of just $5. By investing in socially responsible and sustainable companies, Newday aims to generate competitive return and, most importantly, drive meaningful change in the way companies in our portfolios adopt environmental, social and governance (ESG) practices and policies. In order to be effective in driving positive impact on corporate behavior, Newday adopts an active ownership model, engaging with companies’ decisions as they affect their stakeholders including communities, employees and shareholders.

For-profit/Nonprofit: For-profit

Revenue model: Newday charges charges 1% on assets under management. However, the company gives back 5% of topline revenues to key nonprofit partners. Each Newday portfolio will benefit a particular, selected NGO. For example, Conservation International is linked to the Global Impact Equity Strategy and Lonely Whale to Oceans. The team is building additional functionality to facilitate donations and eventually users will be able to donate dividends and interest earned.

Scale: Newday’s platform and iOS app officially launched to the public on June 19.

Doug Heske

 

Doug Heske ’s bio:

Linkedin: linkedin.com/in/douglasheske

Doug brings more than 25 years of investment management and leadership experience to Newday, with a record of transforming new businesses for rapid expansion. Prior, he ran the Private Client business for Stone & Youngberg, LLC, was President and CEO of Nollenberger Capital and was CA Regional Director of Piper Jaffray Companies, Inc. He has served on the Executive Committee of the Securities Industry and Financial Markets Association’s (SIFMA) Western District since 1996 and was acting chairman from 2002—2004. He was also formally a member of SIFMA’s Regional Wealth Management Round Table and has served on FINRA’s District 1 Committee. Doug also sits on the board of several San Francisco based organizations such as the Oakland Museum of California.

Alexander Meek

Alexander Meek ’s bio:

Linkedin: https://www.linkedin.com/in/alexandermeek/

Alex has spent his career as a founding member across startup ventures in consumer tech, consumer goods, media and finance. Alex began his career managing wealth for high networth families and covering hedge funds and institutions inequity sales at Deutsche Bank Alex Brown. Alex has served various positions in human rights as Treasurer and Board Member of the Red Ribbon Foundation, Mentor at UN-Habitat (United Nations Human Settlement Program), and a Volunteer at Community Health Africa a Poverty Solution. Alex earned a Major in Economics from St. Lawrence University and a MBA with a concentration in Entrepreneurship from Babson College -Franklin W. Olin Graduate School of Business.


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!

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