Pure SIB News taking a breather today but here are a couple of interesting contiguous stories on impact investing as a whole worth reading…
US – NC Has Become Hotbed For ‘Impact Investing’
Earlier this month, the nation’s largest gathering of social innovators and high-impact entrepreneurs assembled in San Francisco. Organized by recent Asheville transplants Kevin Jones and Rosa Lee Harden, the Social Capital Markets Conference (or SOCAP for short) has rapidly become a premier event for exchanging promising ideas for positive societal change.
The setting for SOCAP couldn’t have been more inspiring. Situated at the Fort Mason Center along the San Francisco Bay, SOCAP coincided with America’s Cup sailing race. With the world’s most technically advanced sailboats racing past at top speeds in the background, everyone’s creativity seemed to surge.
Several key themes emerged. Among them: growing interest in investment capital serving as a catalyst for social change, the acceleration of social ventures in under-served communities and the role of big data analysis as a tool to unlock new solutions.
Each theme represents a dynamic approach to “doing better at doing good” and provides an opportunity to showcase some local innovators in North Carolina.
“Impact investing” is simply investment capital that seeks social and/or environmental value as well as a positive financial return. Current estimates show that several billion dollars a year of “impact investment” are flowing to sectors as diverse as sustainable agriculture, affordable housing, clean technology, and financial services for the poor.
At this month’s Social Capital Market’s conference, SOCAP 2013, nearly 2,000 social entrepreneurs, investors, foundations, corporate and government representatives gathered to discuss the latest trends in impact investing and how to build this market “at the intersection of money and meaning.”
Moving from impact investing 1.0 to 2.0
We have come a long way since the initial conversations about impact investing, which focused solely on the “what” of impact investing. While there is still ongoing debate about definitions and, as one speaker noted, the “talk-to-action ratio is still high,” we are continuing to shift away from the 1.0 of “what” to the 2.0 of “how.”
Within this “how” discussion falls the recent provocative debate about the difficulty of achieving both social and financial impact in impact investing. See, for example, the Stanford Social Innovation Review article by Paul Brest and Kelly Born, “When Can Impact Investing Create Real Impact?” and the responses it generated from industry leaders.
Here at Duke’s Center for the Advancement of Social Enterpreneurship, we believe impact investing has delivered impact, and we are working to prove it.
CASE’s Cathy Clark, PCV InSight’s Ben Thornley, and Impact Assets’ Jed Emerson recently studied 13 impact investing funds and foundations that manage nearly $3 billion in assets. These funds have seen returns ranging from principle return to concessionary rates to market rates and above, in addition to social and environmental impacts ranging from “helping the poor, connecting the disconnected, promoting health, developing housing and improving education.”
Clark, Thornley and Emerson argue that these successes show that “impact investing 2.0” has indeed arrived and that we can learn from and build upon the lessons to understand the “how” of impact investing.