Global Philanthropy Forum - Impact Investing Panel | Acumen
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I had a great time on Tuesday’s panel at the Global Philanthropy Forum with Matt Bannick, Maya Chorengel and David Bank. It was an opportunity for all of us to dig in, in a substantive way, to the “facts and fictions” of impact investing. My high-level takeaways from the panel were: [Read More]
I had a great time on Tuesday’s panel at the Global Philanthropy Forum with Matt Bannick, Maya Chorengel and David Bank. It was an opportunity for all of us to dig in, in a substantive way, to the “facts and fictions” of impact investing. My high-level takeaways from the panel were:
We all agreed that just because there may not always be tradeoffs between financial return and social impact certainly doesn’t mean that there are never tradeoffs between the two. This was language that Matt Bannick used and I thought it captured very well the nuance that, it feels to me, the impact investing sector misses when you just read the headlines.
While the impact investing sector has grown and there’s more money at play, there’s still very little risk capital available, especially for early-stage ventures. I include philanthropically-backed investment capital and enterprise philanthropy in the bucket of “risk capital,” and I’d say that, by and large, a year after the publication of the Blueprint to Scalereport, as a sector we haven’t in any substantive way addressed the “Pioneer Gap” of early-stage, risk capital for entrepreneurs looking to solve old problems in new ways.
A corollary of the previous two points is that we still haven’t mapped out a clear third way between “100% loss of principal” (philanthropy) and “market rate returns.” My view is that until we create an equilibrium point around what this third way is, and until we do a better job articulating the impact we are having (and on who), then we have come up short in creating a new sector and a new way to solve problems.
We have to get the metrics right. If we can achieve breakthrough in how we quantify and understand impact, I believe we could change the whole game. We all agree that there are some tradeoffs between seeking returns and seeking impact, but because it’s so much easier to gravitate to what we can quantify – the financial returns – and so much harder to accept tradeoffs when you struggle to describe what you’re gaining when you take more risk, we keep on gravitating to financial returns as the best indicator of success. The onus is on all of us to articulate and quantify the increased impact you can have when you target harder-to-reach populations; when you dig into untested sectors like truly low-income housing or land rights or sanitation; or when put up risk capital on new, untested, potentially breakthrough ideas.
This panel was a conversation that wouldn’t have happened just a few years ago, and it’s a testament to how far we have come as a sector that we are able to delve deeper into the questions that underlie this work. Enough time has passed that we have real data from which to draw initial conclusions.
At the same time, I’m reminded of how early we are in our evolution as a sector. “Impact investing” as a term was coined in 2007, and each of the sectors in which we are investing – whether clean energy, agriculture, primary health services, etc. – are themselves nascent. It is early days, and we must continually remind ourselves that we are in a period of experimentation and learning. Indeed I fear that in an age where information and ideas flow so rapidly, we have rushed to conclusions far too quickly relative to the time it takes to actually build businesses on the ground. We must ask ourselves: what changes can be accelerated by better information flows, better technology, more appropriate risk capital, and what changes necessarily come more slowly? I know that if we retain a spirit of inquiry and openness, if we allow ourselves to continue to learn and evolve, rather than getting boxed in to an old, narrow view of what success looks like, then I believe we can really get there.
In case you missed the livestream, here’s the video of the panel. Enjoy.
One of my life’s privileges was standing with a group of ordinary citizens listening to President Nelson Mandela at an outdoor Town Meeting in 1999. Here he was, this most extraordinary human being and moral leader, speaking in a neighborhood, thanking and preparing them as he peacefully – and historically – handed over power to a new generation. There was no fanfare, little security, an air of informality: just a giant in our midst. I was running the Rockefeller Foundation’s Next Generation Leadership program to build a diverse corps of American leaders. Days earlier, one of our fellows, Ingrid Washinawatok, a powerful Native American leader working on behalf of indigenous peoples, had been senselessly murdered in Colombia by FARC soldiers. As I listened to Mandela, I thought of how his immeasurable courage so influenced Ingrid and so many like her. His own walk to freedom had enabled the whole world to believe. And act. And now it is to us to continue. [Read More]
Bank Alfalah and Acumen have partnered to launch a program entitled ‘Eradicating Poverty through Entrepreneurship in Pakistan’, based on a $40,000 grant from the Bank. The signing ceremony took place in Karachi today and was attended by Jacqueline Novogratz, Founder and CEO of Acumen, and Atif Bajwa, CEO of Bank Alfalah amongst others. With a view to impacting sustainable development, this is likely to become a multi-year program, based on impact assessment at the end of the first year of the project. [Read More]
Most of us don’t consider the implications of having a functioning toilet each and every time we use one. We rarely worry over where we’ll go when nature calls. There’s no concern over whether or not the waste will end up in our drinking water or if we’ll contract illness due to the inability to wash our hands. Yet, for the one in three people around the world who lack access to adequate sanitation, these seeming non-entities are serious daily struggles. [Read More]
Justus Kilian is a current Global Fellow working in Gulu, Uganda at GADC. GADC sources both organic and conventionally-produced cotton from over 55,000 smallholder farmers in the region. In another life, Justus worked as a Senior Financial Analyst at Merrill Lynch, and as a Global Securities Technician at the Northern Trust Company. The next year of his life will be challenging, uncomfortable, purposeful, and transforming. Join him as he shares his journey and lessons learned on how Agriculture can shape and transform the economy in Uganda. [Read More]
Acumen today announced a INR 43 Million/$750,000 equity investment in Asian Health Alliance, a company that owns and operates affordable and high quality medical diagnostic facilities in low income semi-urban areas and rural areas across Karnataka under the brand name Asian Health Meter (AHM) at prices which are significantly lower than large, metro centric diagnostic chains. [Read More]
Acumen has been selected for the ImpactAssets 50 2013, a free, online resource for impact investors and their advisors. The IA 50 is the first publicly available database of private debt and equity impact investment fund managers. Fund managers included in the IA 50 2013 manage a combined $10.8 billion in assets within the impact investing market. It includes a broad range of organizations spanning domestic and international geographies, sectors, asset classes and impact areas: [Read More]