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Reflections from the Road: Summer Travel Insights for Place-Based Impact Investing

This month, LOCUS Staff share what their takeaways from convenings on place-based impact investing around the country.

Pictured: (Left to Right) Teri Lovelace, LOCUS Impact Investing; Mike Loftin, Homewise; Keith Bisson, Coastal Enterprises; Eva Schulte, Travois - Teri Lovelace spoke on a panel at Confluence Philanthropy's 2nd Annual Advisor Forum titled "Investing in Place Across the Portfolio."

AICPA Private Foundations Summit | Washington, DC

Nearly 200 CFOs, controllers and other financial professionals convened in Washington, DC for a 2-day summit to learn about tax matters, legislative updates and emerging trends facing private foundations.  

Q:  What were attendees talking about?

Tomer Inbar, a law partner with Patterson, Belknap, Webb & Tyler and Brian Manca, Vice President from the Chan Zuckerberg Initiative (CZI),  an industry leader in disrupting traditional philanthropy, shared newand  innovative models to achieve social impact.   Brian and Tomer noted that private foundations are using more complex giving structures for community benefit.  They observed that these tools – LLCs, donor-advised funds, social enterprises and joint ventures – are complex and bring their own pressure points for foundations including compliance, reporting and monitoring functions.

Q: Key Takeaways?

Donors and philanthropists, particularly the next generation, are increasingly looking for flexibility and operating efficiencies in how they make a difference in the world.  No longer is grant making the only option. The shift is reflected in these key takeaways: (1) philanthropy is changing and the field needs more concrete examples of these innovative models; (2) foundations can and should learn from (and with) each other to employ new tools for greater community impact; and (3) in the long run, the field needs more infrastructure to support these innovative charitable models.

SPECTRUM | Atlanta, GA

Social Capital Markets (SOCAP) and Conscious Company Media (CCM) hosted the inaugural SPECTRUM conference in Atlanta last month.  The two-day immersive convening brought together nearly 150 business leaders, entrepreneurs, thought leaders, cross-sector practitioners and investors to identify ways to build an impact economy based on equity, diversity, and inclusion.

Q: What did you hear that’s important for place-focused foundations?

People of color represent the country’s fast-growing population of social entrepreneurs – many of whom are offering authentic market-based solutions to enduring community challenges. Despite the eagerness and qualifications, many entrepreneurs or aspiring entrepreneurs of color face additional systematic barriers when attempting to access networks of investors and socially motivated capital.

Q: What’s relevant for those engaged in impact investing?

There were a couple of themes that emerged over the two-day summit that should interest place-based philanthropies – the first being around profit vs. return. The question of return is one that often comes up for foundations looking to get into impact investing. As fiduciaries, it’s a responsible question for board members and executive leadership. One audience member questioned if the goal of impact venture funds is really to maximize profit, will we ever achieve the equitably-held wealth and opportunity that impact investing is striving for? In response to this question, one speaker noted that the maximization of profit will continue to leave communities behind, but the maximization of return – blending financial and social outcomes – will help impact investing achieve its objective.

Q: Any Insider Tips?

As a place-based impact investing firm, many of LOCUS’ clients are community foundations – public charities who, in theory, are only as successful as the members of their community are. Several entrepreneurs of color mentioned that, upon their successful business exits, they felt an immense amount of responsibility to “pay it forward” and support aspiring entrepreneurs of color. This strikes me as an opportunity for community foundations to leverage some of those assets through entrepreneur-focused loan funds or DAF-backed credit facilities.

2019 Appalachian Community Foundation Institute | Charleston, WV

Philanthropy West Virginia’s annual event brings together community foundations and other place-based funders (e.g., United Ways, hospital and university foundations) from across Appalachia to network and learn together.

Q: Were there any examples with potential for replication?

In a session on Partnerships that Save Our Downtowns, Susie Nelson, Community Foundation of the Ohio Valley, shared the story of her community’s efforts to restore a downtown theatre. This music venue was a central part of the community for decades, contributing to both the quality of place and to economic development. The story really demonstrated the power of blended capital – bringing together a range of partners and sources of capital to make this deal happen. No single partner could have done it alone. But, philanthropy, local government, economic development, public funders and scads of community volunteers working together were able to restore the theatre, a key piece of downtown revitalization. The power of partnership – and blended capital – is a lesson for many communities, particularly rural places, that are working to restore their downtowns as a key strategy for economic renewal.

Q: What entry-point actions are foundations taking to advance community development as a primer to local investing?

LOCUS had the opportunity to sponsor and moderate Bang for the Buck: Low-Cost Ideas with High Return, that shared ways that three community foundations are exercising community leadership by supporting community development.  While none of the “low cost ideas” shared in the session involved place-based investing, these themes can apply to foundation action across the board.  They include: 

  • Start by listening to your community partners. Discover what they need to do their work better and design programs or investments to meet those needs.
  • Matching dollars can be a powerful tool. They encourage community partners to engage donors and other members of the community, while leveraging the foundation’s investment.
  • Providing community partners with information and new ideas is one thing; offering implementation dollars for those partners to take action in the community is where the impact is really felt.
Social Determinants of Health Symposium | Cleveland, OH

Modern Healthcare gathered experts to discuss the inseparable relationship between the social determinants of health and health outcomes.  

Q: What do you think is relevant for healthcare organizations thinking about impact investing?

The goal of the gathering was to discuss systemic inequities and how providers can develop effective and innovative solutions to benefit the communities they serve.  Dr. Tomislav Mihaljevic, CEO of the Cleveland Clinic, spoke about his organization’s three fundamental activities of healthcare anchor institutions:  job creators, educators and healthcare providers.  Impact investing can be as simple as investing in your employees by raising your organization’s minimum wage to $15 just as the Cleveland Clinic has done this year.