It’s time for Impact Engine’s third annual Holiday Reading List. For 2017, we decided to tackle the who-where-why-and-how of impact investing over the course of the year. We hope that during the holiday season, you are able to spend time with family and friends, and to reflect on the ways in which you’ve had impact this year. We encourage you to click through to the reports we’ve included in this list, as we hope that they inspire you to make new resolutions for impact in 2018.
When we meet with entrepreneurs, we are interested in their solutions and whether they are innovative and scalable. However, a crucial part of our process is evaluating whether they have a deep understanding of the problem they are addressing. So while there is much to be celebrated in terms of progress this year, it is important to start with understanding why impact investing is so critical today. The issues our society faces are broad and deep. CFSI’s report on employee financial health outlines just how financially stressed people are these days. Earlier this year, the RAND Corporation detailed the rising prevalence and cost of chronic health conditions and the toll they take on individuals and society. And Stanford published a report on the state of racial and ethnic inequalities in education, housing, wealth, and a number of other arenas.
The good news is that the list of people who are focusing on these issues and investing in solutions to address them is growing broader. 2017 saw everyone from tech companies to celebrities entering the impact investing fold. Salesforce announced the launch of a $50 million impact fund, Bain Capital announced its $390 million Double Impact Fund, and TPG’s Rise Fund raised $2 billion (and even Bono is onboard!). This influx of institutional capital is a positive step towards scaling impact investing.
The hot spots
Where was impact investing happening in 2017? It continues to be a global movement, though GIIN’s annual investor survey reports that 40% of investments are currently going to the US, followed by 14% in Western/Northern/Southern Europe. One place impact investing is happening that might surprise people is the Vatican. Pope Francis has been promoting the field for several years, and other Catholic institutions have been following suit. Of particular interest to us is the increased focus on place-based investing. While not an explicitly impact-oriented fund, Steve Case’s Revolution Partners recently announced it is raising a Rise of the Rest seed fund to focus on ventures based outside the traditional VC capitals of San Francisco, New York, and Boston.
The way it gets done and the results
2017 also offered some evidence of how people have executed impact investing strategies thus far, and how those strategies have performed. TONIIC’s T100 Project recently published insights from impact advisors and consultants. Their site also features personal impact investing journeys in the form of podcasts and videos. Earlier this month, GIIN synthesized a number of reports that have been published over the last several years covering impact investments in private equity, debt, and real assets. They conclude that market rate returns are achievable but that manager selection is a critical factor in determining performance.
We are grateful for the growing community of impact investors and are proud to count ourselves among them. We laud the progress of 2017, and look forward to more development and learnings in 2018.
This article originally appeared in Huffington Post on November 20, 2017.
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