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### Do well and do good.
Entrepreneurs need financial capital to make their vision a reality. Some investors are willing to
take prudent risks in exchange for the potential to make a large social impact. Philanthropic
investors, corporations, government entities and individuals seek to leverage their grants and
investments. Together, social entrepreneurs and investors can help each other achieve a larger
scale impact than working separately.
### Why make mission investments?
* Leverage philanthropic dollars
* Deploy larger capital amounts to make a real difference
* Enable social ventures to grow and reach scale
### Who?
* Foundations seeking to increase impact by using new tools in addition to grants
* Government entities looking to stretch scarce taxpayer funding
* Banks, insurance companies and other corporations desiring prudent community investments
* Angel investors aiming to achieve a double bottom line
# Impact Investing Resources
### Introduction
###### 
In this video, Susan Hammel breaks down what impact investing is by using the impact investing spectrum.
Our graphic shows how impact investing fits within the spectrum of social impact and return.
The Short Guide to Impact Investing is a comprehensive yet accessible introduction to impact investing. It covers the what, why, where, and how of impact investing and includes several examples as well as a glossary of terms.
Rockefeller Foundation president Judith Rodin and Margot Brandenburg, two of the foremost experts in the field, explain what impact investing is, how it compares to philanthropy and traditional investments, where opportunities are evolving around the world, and how to get started. By sharing moving stories of impact investors and the exciting social enterprises benefiting from these investments, Rodin and Brandenburg offer a compelling resource for anyone interested in better understanding the power of impact investing—including retail investors, high-net-worth individuals, and heads of family offices, foundations, banks, and pension funds—while also offering experienced impact investors an opportunity to deepen their knowledge and benefit from the perspectives of other investors.
The Mission Investors Exchange has an extensive glossary of impact investing terms.
Susan Hammel joins Elaine Rasmussen, President & CEO of  to discuss structural racism in impact investing, how other communities can embark on mapping their own eco-system, as well as the untapped opportunities of corporate and unaccredited investors in the impact investing space.
The PRI Pulse is an ambitious research project undertaken by Venn Foundation to learn how Minnesota private foundations have historically used Program-Related Investments (PRIs) from 1998 to 2016.
Its goal was to put its fingers on the state’s PRI pulse and then report back the results, providing Minnesota’s philanthropic and impact investing communities with high-quality baseline statistics on how PRIs have been used in the past, right when many are discussing how best to utilize them in the future.
### Family Foundations
This guide combines Dr. Julia Balandina Jacquier’s 20 years of experience in investment management and input from over 40 wealthy families to create a set of guidelines for managing wealth for both profit and mission. The guide includes case studies, examples of successful funds, common mistakes, and concrete tools for implementing impact investing.
In this article, Dr. Julia Balandina Jacquier provides actionable advice for getting family members and trustees to buy into impact investing.
In this guide, Mission Investors Exchange breaks down numerous impact investing case studies in order to provide actionable advice for small staffed foundations.
This in depth article explains the distinction between Program Related Investments (PRI) and Mission Related Investments (MRI) in terms of requirements, taxes, and regulations.
### Case Studies
“Cambridge Associates and the Global Impact Investing Network have collaborated to launch the Impact Investing Benchmark, the first comprehensive analysis of the financial performance of market rate private equity and venture capital impact investing funds. While the impact investing industry is in an early stage of development, it is poised for growth. One of the chief barriers to industry advancement remains a paucity of robust research on financial performance. Credible data on risk and return can help both existing and future impact investors better identify strategies that best suit their desired social, environmental, and financial criteria.”
Impact Investing 2.0 provides a synthesis of 12 case studies of highly successful impact investing funds from across the globe. The authors use the 12 case studies to look for reoccurring themes and shared attributes that lead the funds success. The study provides a wealth of insight into the workings of the funds as well as practical advice for other funds.
### Investor Tools
The GIIN offers specialized impact investment training for fund managers through a variety of courses that help fund managers build applied skills to successfully attract, deploy, and manage capital. A key program feature includes practical coursework that builds on real market data, case studies, and feedback from leading LPs, GPs, and advisors. The sessions are designed and delivered by experienced practitioners and specialized experts through a flexible format that allows participants to select a training that best suits their professional schedules and obligations.
“ImpactBase is the searchable, online database of impact investment funds and products designed for investors. Published fund or product profiles on ImpactBase gain exposure to the global impact investing community.”
Maximpact Ecosystems offers services, advice, and a deal listing platform for investors, intermediaries, and seekers of capital.
### Measuring Impact
IRIS is a non profit organization that provides standardized metrics designed to measure the social, environmental and financial performance of an impact investment. IRIS’s services are a freely offered by the Global Impact Investing Network (GIIN) as part of its mission of increasing the scale and effectiveness of impact investing.
© 2023 Cogent Consulting PBC | Minneapolis, MN | Susan Hammel, CEO
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# Twin Cities Impact Investing Ecosystem Map
Below is a map of the current impact investing activity in Minneapolis and Saint Paul as of June 2016. For the purpose of this map, an **impact investment** is defined as an investment that seeks to create both positive financial return as well as positive social or environmental impact that is actively measured. This map has allowed our local impact investing community to understand the breadth and complexity of the impact investing activity in the twin cities as well as provide context to each organization how they fit within the ecosystem.
### How to read this map
The Twin Cities Impact Investing Ecosystem Map divides impact investing into twelve different types of impact investments:
* Debt to a not-for-profit end user
* Debt to a for profit end user
* Debt to a public benefit corporation end user
* Debt to a government end user
* Debt to a not-for-profit intermediary
* Debt to a for profit intermediary
* Debt to a public benefit corporation intermediary
* Debt to a government intermediary
* Equity in a for profit end user
* Equity in a public benefit corporation
* Equity in a for profit intermediary
* Equity in a public benefit corporation intermediary
Each of the green nodes represents one of the twelve types of impact investment. The yellow, orange, and red nodes represent end users of capital, intermediaries of capital, and sources of capital respectively. An arrow pointing from an organization into a green node represents that organization making that type of impact investment. An arrow pointing from a green node to an organization represents that organization receiving that kind of impact investment. The green nodes are scaled by the number of organizations they are connected to.
### Twin Cities Impact Investing Ecosystem
###### **Ecosystem Links**
The Twin Cities Impact Investing Ecosystem is a network of investors, entrepreneurs, and not-for-profits who are using capitalism to drive positive change in the world through **impact investing**.
### What does the Twin Cities Impact Investing Ecosystem look like?
Thanks to the support from the Bush Foundation, I have been partnered with Impact Hub MSP to map the Twin Cities Impact Investing Ecosystem. ****
### 
### What is impact investing?
The Twin Cities Impact Investing Ecosystem uses the World Economic Forum’s language for defining impact investing as **an investment approach intentionally seeking to create both positive financial return as well as positive social or environmental impact that is actively measured**.
By this definition an impact investment could be an equity investment in a social enterprise, a program related investment (PRI) to a local not-for-profit, a loan to a community development financial institution (CDFI), or a retirement account investing in a fixed income bond fund that seeks and measures social impact. As long as the investor is **intentionally** seeking a social return and the social impact of the investment is being **measured,**the investment is an impact investment.
### **Who is part of the impact investing ecosystem?**
The impact investing ecosystem is the sum of four types of organizations and individuals:
* **Sources of Capital** — The sources of capital are organizations or individuals who control their own funds which they use to make impact investments. This category includes private foundations, venture capitalists, and both accredited and unaccredited investors.
* **End Users of Capital** — The end users of capital are the organizations that convert capital into social impact. These organizations include not-for-profits and social enterprises.
* **Intermediaries of Capital**— The intermediaries of capital act as a bridge between the sources of capital and the end users of capital. Like sources of capital, intermediaries make impact investments into end users of capital. However, unlike sources they are dependent on external funding. For example, a CDFI might act as an intermediary between private foundations and local entrepreneurs. The CDFI would receive loans from the foundations which it would use to make smaller loans to entrepreneurs. Intermediaries can take the form of CDFI’s, financial advisors, banks, or funds.
* **Field Builder**— The fourth category of the ecosystem is not exclusive from the other three. A field builder in the impact investing ecosystem is an organization that is doing any kind of work to grow or mainstream impact investing. While the definition of field builder has not been agreed upon, the Bush Foundation has a working definition that I like best. They define a field builder as one that does any of the following activities in relation to impact investing:
  + Provides critical data and analysis
  + Spreads great ideas and builds capacity
  + Advances public awareness and policy
  + Builds and supports leadership networks
### Gaps in the Ecosystem
During our research to create the Twin Cities Impact Investing Map, we identified the following gaps as the main roadlocks to scaling and mainstreaming impact investing in our community.
###### Communication Platforms, Language, and Terminology
The language of impact investing has been cobbled together from traditional investing and philanthropic jargon. Terminology is inconsistent across organizations and communities which hinders the evolution and exchange of best practices and constructive criticism. Furthermore, impact investing ecosystems comprise of siloed organizations that lack open communication channels with each other. What kinds of technology platforms are ecosystems using to address communication barriers? What steps are ecosystems taking to open communication channels between organizations? How are ecosystems addressing language and terminology issues?
###### Diversity, Equity, and Inclusion
To paraphrase national impact investing expert Henry McKoy, if impact investing replicates the existing white male investing arena, we will have failed miserably. Impact investing ecosystems have an opportunity to create something different but will have to be intentional in doing so. What steps are ecosystems taking to embed diversity, equity, and inclusion in all stages of the impact investing process?
###### Connecting Investors and Entrepreneurs
There are currently no formal systems in place to connect social entrepreneurs with the funders who have compatible impact investing interests. A symptom of this disconnect is an apparent absence of deal flow. How are ecosystems connecting investors and entrepreneurs? What kinds of matchmaking are ecosystems using to pair investors and entrepreneurs?
###### Measuring Social and Environmental Impact
Measuring social and environmental impact has proven to be a challenge for both investors and investees. For investees, the resource intensity of measurement is burdensome. On the other hand, investors are unsure how to track the social and environmental return on their investments. What measurement frameworks have been successful in other ecosystems? What are the trends in measurement strategies and applications? What has been useful in teaching investors and investees the value of measurement?
###### Role of Investment Consultants and Investment Advisors
Investment consultants and investment advisors have enormous influence over potential impact investors and impact investing institutions. In some cases, we have observed traditional investment consultants acting as barriers to foundations engaging in impact investing. How could we partner with investment consultants and investment advisors to unleash more impact investing capital from institutional investors?
###### Role of Field Builders and Intermediaries
The focus of the ecosystem map was the impact investing activity within the Twin Cities so we mapped the sources, intermediaries, and end users of capital. However, our investigation of the ecosystem revealed an equally important fourth category of individuals and organizations: field builders. Field building is one of the many nebulous terms in the ecosystem that means something different to everyone. While difficult to define, field builders are crucial to scaling the ecosystem. Similarly, intermediaries defy definition. They are each unique in their structure and form but are essential in bridging the capital flow between investors and entrepreneurs. What kinds of field builders and intermediaries populate other impact investing ecosystems? What kinds of field builders and intermediaries would benefit the Twin Cities impact investing ecosystem?
### Action Steps
###### **Learn**
For both introductory and advanced material, check out our  If you are a Minnesota Council of Foundations member you also have access to me as the Impact Investing Executive in residence.
###### **Connect**
Essential to the health and prosperity of the impact investing ecosystem is our ability to sustain and create connections between stakeholders. On the side of this page I have listed upcoming impact investing events. I encourage you not only to attend these events, but to bring a friend or colleague that you would like to introduce to the ecosystem. You are invited to join the Impact Hub MSP’s Impact Investing Community of Practice and Cogent Consulting’s . Minnesota Council on Foundation members are also welcome to join the Mission Investors Network.
###### **Commit**
However, at the end of the day the impact investing ecosystem is about writing checks. Here are some easy ways you can get started impact investing today:
* For $20 dollars you can buy a Calvert  note which goes to funding loans that will expand local business, affordable housing, and food systems in the Twin Cities.
* Open a Donor Advised Fund through The Minneapolis Foundation and participate in . InvestMPLS is a $10 million revolving loan pool with a fixed interest rate paid to participating investors that invests in local community development financial institutions (CDFI’s).
* Donate to a local CDFI.
* Ask your financial advisor how you can begin impact investing.
* Ask your employer’s benefits representative where they’re investing your retirement savings.
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