The document discusses social finance, impact investing, and how foundations can utilize these approaches. It provides an overview of impact investing, noting it aims to create positive social, environmental, and economic impacts while generating financial returns. It also discusses how foundations can make program-related investments and mission-related investments to support social finance. Finally, it examines barriers to growth in the impact investing market.
1. THE J.W. MCCONNELL FAMILY FOUNDATION
Beth Hunter
Sr. Program Officer
Social finance, impact investing and
foundations
2. From ‘Social Return on Investment’ and
‘Responsible Investment’
• Negative screening proactive triple bottom line
• Environmental, Social, Governance (ESG) standards
• Innovation in financial markets
To Impact Investing
• Investments that create positive social, environmental
and economic impact, while generating financial return
Foundations
• Program related investments (PRI) & Mission related
investments (MRI)
Social Finance: a range of financial instruments seeking to achieve social
and environmental as well as financial returns
7. • Impact measurement and
metrics
• Intermediaries
• Financial innovation & financial
products
• Regulation
• Sector reputation
• Liquidity & exit strategies
Current Barriers
Market Development Barriers
8. 1. Building the Marketplace 3. Sector Capacity Building2. Impact Investments
MRI/PRI
o Target of 10%
o Intermediaries
Social Innovation
Fund
Social Finance at McConnell
9. Social Finance as a tool
3.5% 2.1%
94.25%How is our
Foundation
Capital allocated?
Innovation in financialmarkets – new ways to invest ex. fundswith patient capital Impact investing – about the intentionality. Also, whatis new isthatFdns are becominginvolved.
Examples of intermediaries are investment funds, like Investeco.
This is global ***
Everett 2011Purely commercial vs charities (social enterprise in the middle)Popular (highsupply) space = clean tech, real estate
-clearway to measure, assess as part of return, esp if lower return-Financial innovation: people have a range ofconventionalinvestmentproducts (mutualfunds, on-line, banks…), not so impact investment-regulations: charities vs businesses; Foundations: PRIscannot count as charitable expenseagainstdisbursement quota if theyfail – it’s a loss (Canada vs. US) – sorisk-adverse & smfdnsunwilling.à-liquidity: rapid exit needed to unlock capital (pension fundsetc)