![]() ![]() The notion of catalytic capital is increasingly important. What will you be discussing at The Economist's Impact Investing event in New York on February 15? I think we still have a lot of work to do to build stronger bridges between the new generation of impact investors and the thousands of savvy, high-impact nonprofits that operate around the globe. These organizations function like social enterprises and need creative financial structures to support their innovation, their growth and their sustained success. In particular, I think too many people overlook the power and value of investing in nonprofits. It’s quite encouraging.Īt the same time, I don’t think there has been enough recognition of the opportunities that exist in segments that aren’t fully commercial-at least not yet. How well are companies adapting to the mainstreaming of purpose-driven finance? In what ways is impact investing making headway, and where is it lagging?Īs a whole impact investing has made great headway, especially on the ESG front and in screening funds for impact opportunities. Once considered the province of government, these funds are now attracting private and philanthropic capital, and making investments that are responsive both to the needs of capital seekers and to the expectations of investors. The other significant development in recent years has been the rise of blended funds. We’re already beginning to see the ripple effect throughout the market, as investors increasingly look to quantify their double- and triple-bottom-line strategies. Impact investing is no longer little-understood market niche It now attracts some of the world’s most prominent funds and investors. The entrance of big name investors into the impact space is proving to be a powerful endorsement for this work. Where have you seen impact investing make the biggest strides in recent years? The impact investing sector, as a whole, cannot live up to its potential if we ignore this “missing middle”. This catalytic capital is vital for thousands of organizations that otherwise are not able to innovate, grow or sustain their promising solutions to poverty, health, climate, and other challenges. While that is sometimes true, it ignores a huge segment of the market: organizations that need patient, flexible, risk-taking capital that is willing to accept a lower return when needed. There is a sense among some that investors can have it all, that they can always earn a market-rate return and achieve deep impact with no trade offs. There is tremendous optimism in the market the rapid expansion of commercial investment opportunities is evidence of that, as is data pointing to market-rate returns-something that 20 years ago, few would have imagined to be possible.īut, that enthusiasm-and even some of that research-creates a bit of a blind spot. What challenges do you see for the future of purpose-driven finance? We are providing “catalytic capital” that we expect to help unleash significant levels of new investment and achieve greater impact than we could with our capital alone. Third, and finally, we are using a $500 million pool of impact investing assets to build new solutions to the capital gaps that hinder many high-impact organizations, enterprises and funds. In practice, that means we make grants to support new products and platforms, as well market research, education and convenings that encourage collaboration and disseminate best practices. Second, we are leveraging our 30 years of experience to help build up the impact investing marketplace overall, making it more efficient, effective and inclusive. At its core is our continued strong support for the Foundation’s program priorities, including a new portfolio of climate investments. Our single biggest initiative addressed the preservation of affordable rental housing across the US. The Foundation began its impact investing work 30 years ago and it has ranged widely since then, including everything from microcredit in its earliest days to sustainable agriculture, women’s health, arts and education, and community development. This has included a financial management role in the nonprofit sector, investment banking with a focus on public finance, and, for nearly 20 years, impact investing at the MacArthur Foundation. ![]() I’ve been exceptionally fortunate to build my career at the intersection of finance – money – and mission. ![]() Please give us a bit of background on yourself, and how your organization plays a leadership role in the impact investing space. ![]()
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