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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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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.


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!

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.


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How This Fund Leverages Its Nonprofit Structure To Make Profitable Impact Investments

This post was originally produced for Forbes.

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

Eva Yazhari, co-founder and CEO of Beyond Capital, a nonprofit organization that makes profitable, seed-stage investments in India and East Africa, says the nonprofit status “is vitally important for us.”

Operating as a nonprofit has allowed the organization to attract pro bono resources that made the fund operationally possible.

“If you think about a fund of our size, the economics don’t work when you’re taking a two and twenty,” she says referring to the standard venture fund model of charging investors a 2% management fee plus a carried interest of 20% of the profits.

The Beyond Capital fund is just $1.8 million, meaning that a 2% management fee would pay only $36,000, not enough to run a fund.

Eva Yazhari, Beyond Capital

Beyond Capital was born as a family philanthropy. “About two years in, we realized that there was a tremendous appetite from our networks to focus their own philanthropy on what we were doing,” Yazhari says. You can watch our entire interview in the player at the top of the article.

The firm had its first exit near the end of 2017, yielding the fund a 26% IRR. The fund invested in ERC Eye Care, a low-cost eye care operation in Northern India that provides eyeglasses and cataract surgeries to people living below the poverty line.

Using a hub and spoke model, the company operates two “hub” hospitals where surgeries are performed. Clinics in small villages where residents could go for screening provided the spokes. Yazhari says the $20 cataract surgeries are the most profitable line of business.

Osman Khan, a member of the Beyond Capital board, highlights the fund’s structure. “It has developed a rigorous and systematic framework to identifying and evaluating enterprises and readily quantifying and assessing those that are currently making, or are expected to make, the greatest impact at the ‘bottom of the pyramid.’”

Yazhari outlined four aspects of the framework:

  1. “We’re investing in people.” She says this is a lesson she learned while working on Wall Street.
  2. “We’re really looking for simpler solutions to complex problems.” As an example, she points to their investment in Kasha, a mobile retail platform that sells women’s health products, including sanitary pads and contraceptives in Rwanda.
  3. “We also are very strict on having an impact first lens.” Before investing, Beyond Capital ensures that the management team of the company has inculcated their mission into the business model to avoid mission creep in the future, especially if and when investors without an impact first approach bring funding to the table.
  4. Prove the unit economics and scalability. She highlighted the need to ensure that the unit economics work so that the business can scale up, generating cash flow to help fund the growth.

The fund’s average deal size is just $75,000. Investing such small amounts in faraway places could put a burden on financial returns. This is where the nonprofit comes to the rescue. By donating her own time for several years and getting due diligence services donated, the firm has been able to keep diligence costs to near zero. One key is the volunteer services of a board member based in Bangalore.

Another tool that helps maintain low cost and high effectiveness, she boasts, is her phone. A quick “what’s up” on Whatsapp yields, “the best update and really more information than we would get in the monthly or quarterly reporting,” she says.

Yazhari says the fund is now in the process of raising a $2 million round of grant funding, she hopes to close in October, noting that $800,000 is already committed. That should allow the fund to make another 18 investments.

So far, the first fund has a paper return of 30% IRR, based on the valuations of the companies that have gone on to raise additional funding. The goal, she says, is to be able to reinvest the profits from the fund in more companies, ultimately allowing the nonprofit to become “financially sustainable” by 2024.

Yazhari’s heart is in this work. She says she has been inspired by her grandfather who started a hospital in Tanzania in the late 1950s. She’s found a way to honor his legacy by leveraging her Wall Street experience to build a nonprofit that is now reaching more than 2.3 million people.

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!

One Key To Impact Investing: Start Big

This post was originally produced for Forbes.

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

Robert Rubinstein, 66, founder and chairman of the TBLI Group, has been advocating for sustainable, responsible or impact investing since the mid-1990s. One of the key lessons he’s learned: start big.

“I always focus on irresponsible investors and criminals. And I always communicated in their tribal language, so I only showed them self-interest, opportunity and money flows,” Rubinstein jokes enthusiastically, referring to the investors who didn’t already employ some form of responsible investing.

Those money flows were key. He says others in the space have made the mistake of focusing on the “moral imperative.” Money managers face targets, he notes. If they don’t meet their benchmarks they get fired. The only way to get through to them is to speak their language and to focus on financial returns.

Robert Rubinstein, TBLI

You have to package it in a way that they can move zeros,” he says, noting that money managers have to put lots of money to work and can’t be bothered with investments that are too small.

“Too much of the impact space is only about smiling children drinking milk in Tanzania as the only form of impact. That’s a form; it’s not the only form. So, our definition is broader because we want to get switched to a values-based economy, an economy based on well-being and a low to zero carbon economy. You can’t do that on small scale. You’ve got to do big time.”

He says that “most” companies already have an internal price on carbon built into their financial models. That some people in Washington decry climate change as fake doesn’t matter. “It has nearly no influence whatsoever on institutional investors.” They are looking to “decarbonize portfolios at scale.”

Some of the sectors that excite him for making impact investments at scale include public transportation infrastructure, community banks and what he likes to call “fuel-free energy” like wind and solar. These are all areas where investments can be made at scale.

Ibrahim AlHusseini, founder of The Husseini Group, who has attended TBLI events, says, “In the past, the prevailing narrative was that money must be left to grow unencumbered by the wealth holder’s values. Now we have the choice to make equal or larger returns while we solve real social or environmental problems at the same time.”

Getting to this point, however, has been a long road. Rubinstein says he feels like a “25-year overnight success.” When he started publishing his sustainability magazine in 1995 he would sometimes be invited to speak at conferences. He would leave copies of the magazine around for the asset owners and managers. “They were afraid to touch it. They thought they might get some illness or disease.”

He put the magazine aside in 1998 to launch TBLI Group, which stands for Triple Bottom Line Investing—profit, people and planet, though “not necessarily in that order,” he quips. The firm has three business lines: ecotourism, conferences and consulting. Most people get to know the firm, which he says is profitable, through its conferences, usually held twice each year in different places on the globe.

Toni E. Symonds, senior policy advisor to the California State Legislature has attended the conferences many times—typically at her own expenses, she was careful to note—says, “TBLI events are gathering places for people who want to use their time and talent to support upward mobility and create inclusive economies.”

“In the 15 years since I attended my first conference, TBLI has served to influence and inspire many aspects of my public policy work.” She boasts of drafting a bill in 2005 that would have set California’s first greenhouse gas emissions reduction targets and another in 2008 that would have the state create an investor-based climate change disclosure standard for public companies doing business in California.

As you can see, Rubinstein has influenced a shift in the financial markets over the past 20 years, but his work is not done.

“The problem is that global financial systems [have an] I win-you lose mentality. TBLI would like to change investment perspectives to a values-based system whereby everyone has the opportunity to be a winner. That’s a good problem to solve. And we are here to take on this challenge,” he says.

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!

This AI Tool Could Revolutionize Impact Investing

This post was originally produced for Forbes.

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

David Shrier left MIT after adopting the school’s mission and applying it to his artificial intelligence startup, Distilled Analytics. He’s hoping to disrupt impact measurement for companies and investors alike with the company’s new product, Distilled Impact.

“MIT’s mission is to solve the world’s biggest problems through technology,” Shrier says. “We spun out of MIT to look at how can we apply the tools of data and analytics and AI to help address the world’s biggest problems.”

“Distilled Analytics is applying data science to critical issues of activating private capital to build a better world,” he says.

“I was inspired to follow this path when I woke up one day and realized I couldn’t explain to my young children Julia and Henry what daddy does for a living,” he says.

He left his prior employer with people he admits not liking to join MIT, where he spent five years. At Distilled Analytics, he’s built a team he likes, including MIT professors Sandy Pentland and Roberto Rigobon along with Alex Lipton, whom he describes as the “legendary Wall Street quant.”

David Shrier

Watch the full interview with Shrier in the video player at the top of this article.

“We want to create structural solutions to society-scale problems by using advanced analytics,” he says.

So, what does Distilled Impact do? In Shrier’s words: “Distilled IMPACT provides investors with objective, quantitative, 3rd-party-sourced (vs self-reported) AI-driven assessments of the non-financial impacts and risks of their investments.”

Using new computational social science from MIT called “social physics,” Distilled Impact analyzes vast amounts of public information to measure environmental, social and corporate governance (ESG) data.

“With the advent of things like the Internet of Things and other ubiquitous data networks, we were able to come up with third-party, credible, quantitative data sources and new kinds of analytics that leverage artificial intelligence and machine learning to measure instead of guess,” Shrier says.

“The methodologies that we use are transparent,” he says. The dashboard provided by the platform gives scoring around the “E.S. and G. factors” that users can drill down on so they can see how the scoring was achieved.

Shrier challenges people to get more comfortable with data. He acknowledges that it feels a bit like eating oatmeal. “But we live in a world immersed in data and where our data is is out there and we need to understand better what our data is how it’s being used and what our rights are with respect to that data.”

The SAAS system is cloud-based. It is designed for institutional investors and family offices that seek both profits and impact.

One key point of distinction, Shrier notes, is that unlike other systems that pull data only on public companies, Distilled Analytics can provide data on 260 million companies, including many private ones.

Shrier notes that the system will save time for both investors and for company executives. The system doesn’t require the company to generate any new reports or data. The evaluation uses publicly available information.

Shrier, says his superpower is synthesis, his ability to take lots of complicated ideas and condense them into a new product or a new opportunity. Impact investors now have an opportunity to judge for themselves using Distilled Impact.

If you share my passion for doing good with your money, learn how you can become an impact investor with my online course, 25% off with this link.


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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!

Slow, But Steady: The Growth of Impact Investing and Social Enterprise

PATHFINDER Interview with Assaf Weisz, co-founder of Purpose Capital

In January this year, we connected with Purpose Capital’s co-founder, Mr. Assaf Weisz, to check in on the (financial) health of the Impact Investing space. Sure, we hear more and more about how interested financiers and indeed, young people are, in the idea of socially driven business or financial models. But what does this interest look like out there, in reality, and on the field?

Mr. Weisz began Purpose Capital with two other founders “back in the year when The Rockefeller Foundation coined the phrase ‘impact investing’”. Since then, he’s developed a decade of expertise in his field. He’s the perfect person to discuss industry developments with.

What are the overall trends in the space of financing for social purpose businesses?

Mr. Weisz reckons that while functioning, the space is still small. There has been a steady increase in the number and even caliber of entrepreneurs. There’s been an increase in the number and variety of investors. There’s been an increase in infrastructure for the space. The entire development universe has grown. “But, it all still remains relatively small compared to where it should be.”

It all began with a bunch of social entrepreneurs who had a hard time accessing capital because there was so little of it, Mr. Weisz explains. Then, slowly, investors started joining. First it was the few interested Angels and Foundations. There were a small number of deals. And they were willing to accept lower returns for a higher social outcome. Purpose Capital has worked to increase the visibility of social entrepreneurs (“SocEnts”) and educate investors since this beginning.

But then things began to change. People wanted profit and social impact, compromising on neither. Indeed, they began to focus on building sound businesses that could also create impact, not just settling for one idea over the other. It’s been a few decades. Still, realistically and honestly speaking, social enterprises continue to struggle with capital.

There has however, been a more recent change from the last few years that is important. Mr. Weisz elaborates that back in the day, most deals were done on the private market. These were conducted behind closed doors, with a lucky few finding each other. But increasingly, there is retail funding available. Retail funding includes a myriad of fresh financial models including the more popular one, crowdfunding. Also there are more public names getting involved. There are networks and exchanges now. No longer are social entrepreneurs and their financiers isolated to a lucky few private transactions. Social finance deals have begun to enter the mainstream world.

Often, financiers would like to fund innovation but insist on proven success. Innovation, proven at scale, in a young industry, is hard to come by. How do we get past this trap?

“That’s a tough one,” acknowledges Mr. Weisz. He gives it a few moments of thought and speaks again. It depends on the type of innovation too, he says. For instance, governments have historically been the most accessible and reliable for scientific innovation. Finding funding for business model innovation is definitely harder. Angels are always an option, though one must find the right connection. Investment also varies by place. Canada, for example, has been more risk averse than America. So there are options but in reality, for most, it is difficult to sell an idea in the space of global development.

So realistically, when will things change?

Like in the case of other great changes, a bunch of things need to happen to make a sizeable shift. For one thing, there has been a lot of focus and growth in the innovation economy over the past few decades, which is quite promising. Secondly, the growth of the industry will play a big role in its own shift. He explains, consider Silicon Valley. The investors in their industry come from within it. They started out as technology entrepreneurs who became successful and found their way to the top, to becoming power players and influencers. By contrast, prior generations of Toronto based tech investors came from backgrounds in banking or business in general, often finding themselves in uncharted territory. Similarly, we need more social entrepreneurs to become influential power players, to bring attention and resources to our lot.

“As a veteran of the industry who’s seen it grow from nothing, what are you most looking forward to in the impact investing world?”

Mr. Weisz is excited for all the budding opportunities to come to fruition, of course. But what he most looks forward to is “for the concept of social entrepreneurship to increasingly become invisible.” He elaborates that he looks ahead to a time when social impact and profit are so interwoven that there is no such thing as business without impact. A time when all entrepreneurs are impactful and all enterprises deliver both, financial and social success. A time when business, as a concept, has changed entirely because of what we do today.

This is no small dream to dream, Mr. Weisz, and indeed, it is a brave one. But then again, he knew about the industry before it was an industry. And so, we end the conversation on a note of hope.


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