Ecotrust: Impact Investing through the Natural Capital Fund
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Ecotrust: Impact Investing through the Natural Capital Fund
- 1. Natural Capital Fund Imagining and investing in essential transformations.
- 2. Broken
- 5. Philanthropic funds enable new impact investment capital to enter the market IMPACT AT SCALE IMPACT AT SCALE Natural Capital Fund Equity/Sub-Debt/PRIs Traditional Debt/Public Markets LEVERAGE CAPITALSTACK Philanthropic/Grants
- 6. High-Impact Philanthropy Incubate and Invest Natural Capital Fund Innovate Proof of Concept Scale Reinvest in programs Leverage newcapital Realize gains Tell success stores Inspire
- 7. Example: Ecotrust Forest Management Why is FSC- certified wood unavailable for the renovation of Ecotrust’s HQ in the heart of the most productive temperate forest on Earth? Study existing industry Launch Ecotrust Forest Management, Inc. (EFMI) Raise Fund I: $30M 14,000 acres under management Open Fund II: $100M Over 200,000 acres in pipeline Transform forest management in coastal temperate rainforest from CA to AK Model timber revenues from ecosystem- based approach Develop business plan which monetizes non- timber revenues
- 8. Vision, Experience, Coherence Ecotrust actively invests in Food & Farms, Fishers & Marine Initiatives, Forests, Ecosystem Services, Watershed Restoration, and Indigenous Leadership. To learn more, visit www.ecotrust.org a distinctly bioregional focus on bottom-up, common market driven systemic solutions
Editor's Notes
- Ecotrust is a Portland Oregon based organization, structured as a non-profit holding company, that orchestrates the work of over 15 for profit and non-profits that work on inspiring fresh thinking that creates economic opportunity, social equity, and environmental well-being The Natural Capital Fund (NCF) is Ecotrust’s working endowment. The organization has been investing the endowment in triple bottom line businesses for 20 years. Over this time period, Ecoturst has raised $30M in grants and PRIs for the Natural Capital Fund, and used it to leverage over $800M that has been put to work today in the bioregion
- The industrial system is broken, and traditional philanthropy is a part of the industrial model. Making money from businesses creating environmental and social problems, then donating 5% of profits to attempt to fix those very same problems is not effective. In the wake of the most widespread and severe economic crisis in two generations, and in the face of unequivocal evidence that planetary life support systems are threatened with collapse, this work is more important than ever. Damage mitigation, incremental structural and policy reform, and protracted campaigns for incomplete protections of lands and waters are as obviously inadequate as they are well intentioned. Photos from top left, clockwise: Radioactivity testing on children following tsunami and nuclear reactor damage in Japan Record heat waves in Australia that require new colors be added to weather maps Droughts impacting every major agricultural region Financial crisis headlines
- This is Ecotrust’s coherence test: Does the work focus on the intersection of economic, environmental, and social well being? From that intersection point, we scale up and out.
- Ecotrust ’s role is to innovate, invest and inspire in ways that create wellbeing for people and the places they live. We are: An incubator for social enterprise, designed to identify and test deep innovation; A capital vehicle for investing in promising innovations, both to prove concepts and to scale them. A growing constellation of public, private, for-profit and nonprofit organizations designed to inspire change around the world. The stories of INSPIRE bring others into the movement, and we participate in a global cycle of knowledge sharing and mutual well being.
- The Natural Capital Fund is Ecotrust ’s working endowment. The organization uses it to incubate new business ideas, and bridge the pioneer gap between philanthropic support for “R&D” work and investments from traditional Equity/Debt markets in developed products. We will not be able to reach social/environmental impact at scale without significant involvement from traditional equity/debt, and we won ’t have products for traditional equity/debt investors without Ecotrust’s initial innovation and investment. We leverage grant support to generate data and understand its meaning, and then incubate enterprises appropriate to the expression of the environmental, social, and economic advantages indigenous to the bioregion. - We secure mission- and program-related investments to bridge the “pioneer gap” and provide early-stage financing for the most promising of these disruptive innovations. – We transition these initiatives from proof of concept to scale. The accompanying transition is from a dependent of philanthropic capital to an opportunity for investor capital. In part, this additional source of financing will increase strategic impact - delivering more collateral benefits as we create and work through opportunities emerging from the organization ’s core competencies. In addition, the stable and competitive returns we generate on those investments, earned while improving the wellbeing of people and place, will prove out the thesis that a natural model of development deserves to be the standard model of development.
- Donations to NCF leverage additional capital into the impact investing space, and drive social and environmental impact to scale Profits generated by NCF investments cycle back into Ecotrust to support innovative program work, while principal is invested in new scalable concepts In this way, Ecotrust fosters the integration of philanthropic and investment capital to solve some of our most pressing problems.
- - Ecotrust Forest Management, Inc., (EFMI) is a for profit, majority owned subsidiary B Corporation of Ecotrust - Virtues of EFM: outperformed the timberland investment benchmark from 2006-2013 (the NCREIF timberland index) while delivering significant ecological and social outcomes in terms of carbon storage, salmon habitat restoration, recreational access, and repatriation of lands to Native Tribes - Natural Capital Fund: catalyzed EFM's transition from grant-dependent demonstration project to scalable, self-sufficient model that will prove the natural model of development should be the standard model of development. Leveraged $1.2M of grant-supported development work over six years: identified a problem, analyzed its origins, explored the variables, conceptualized an alternative, and established a mechanism for its actualization, with the potential to transform forest management