Impact Investing: A Lifeblood to Nonprofits and other Social Good Organizations

When the New York Stock Exchange closed Monday, one type of investment was heard loud and clear. Representatives from the Social Impact Investment Task Force sounded the closing bell, bringing impact investing and its potential to solving global developmental challenges to the forefront.

The Social Impact Investment Task Force, an initiative launched in connection with last year’s G-8 Summit, aims to create policy framework to accelerate impact investing, establish a common global approach for measuring social outcomes, and encourage greater engagement across foundations, institutions and private investors.

Impact investing, making investments with the intention of generating both measurable social/environmental impact along with a financial return, is gaining traction around the world and now right here in Minnesota.

“Many angel investors are looking for these kinds of investment options, and are simply not aware of the opportunities,” said Ann Johnson, director of the University of St. Thomas Center for Nonprofit Management. “Likewise, a lot of organizations are looking for investments, and don’t know where to find the investors.

“One social impact angel recently shared, ‘I didn’t know that impact investing is what I was interested in pursuing, until I understood it and could put language to it. I wanted to invest in companies with a social and financial return – and impact investing is exactly what I was looking for.’”

Entrepreneurial nonprofits and for-profit social-good businesses are mixing nonprofit and commercial elements, thinking by “design,” and developing fresh sources of support to increase their organizations’ impact and resilience. Some are start-ups testing ideas; some are long standing organizations making big bets on new ways of doing good. Impact investing is often the support that helps them accomplish change.

“Impact investing reflects an evolution in social change efforts,” added Johnson. “Even Michael Porter, writing in the January 2011 Harvard Business Review, advanced the principle of shared value ‘which involves creating economic value in a way that also creates value for society…shared value is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success.’”

The third annual Symposium on Social Entrepreneurship, Friday, May 2, is the only Minnesota one-day event bringing key national and statewide impact investing leaders together. The event, hosted by the University of St. Thomas Center for Nonprofit Management, is designed for nonprofit directors and managers, social good entrepreneurs, philanthropists and investors, business leaders, policy makers, social change students and all innovation and entrepreneurship enthusiasts.

Participants will actively engage with expert innovation and entrepreneurship leaders who have challenged the status quo of social change. They’ll hear relevant trends, new sources for financing and practical but leading edge methods to create value and resiliency in their work. Members of startup, nonprofit or other social good ventures can register for the symposium at half the cost.