A Hot Summer for Impact Investing

The past few months have been full of news on the growing impact investing sector. Coming off of the announcements earlier this year—Bain Capital starting an impact fund under the leadership of Governor Deval Patrick, BlackRock starting an impact practice and Darren Walker and the Ford Foundation taking leadership of the U.S. National Advisory Board on Impact Investing—Jean Case recently described the increased buzz and activity as A New Inning for Impact Investing. She shares her insights on the growing movement that has until recently been in “spring training,” and an all-star line-up that is now taking shape.

We’ve summarized several key pieces of news from the past few months so you can read all about the latest updates. We look forward to seeing even more momentum this year!

 

Global Progress on Impact Investing

The Social Impact Investment Taskforce, established under the British presidency of the G8 in 2013, met in London in July to talk about progress achieved by member countries and to discuss what’s next for the group. Private and public sector representatives from G7 countries, the EU, Australia, Brazil, Israel, India, Mexico, Portugal, South Africa, China and others were present. Sir Ronald Cohen, Chair of the Taskforce, opened the Plenary Meeting by saying that “it’s impossible to stop an idea whose time has come,” and country report-outs on progress seemed to strongly support that statement. You can find presentations and reports from the Plenary Meeting on the Taskforce website.

New Report: Impact Investing Can Provide Market-Rate Returns

The Global Impact Investing Network (GIIN) and Cambridge Associates released results from a new study, the Impact Investing Benchmark. The report presents aggregate financial performance from 51 private equity and venture capital impact investment funds that have the intention to generate measurable social impact alongside a financial return. The report reveals that many of the early funds, established between 1998 and 2004, have achieved market rate or above market rate returns, demonstrating that impact investments don’t necessarily require financial sacrifice. GIIN and Cambridge Associates will provide quarterly updates on the benchmark.

Mixed Results for Social Impact Bonds

In an attempt to more effectively combat youth recidivism at the Rikers Island jail in New York, Goldman Sachs and Bloomberg Philanthropies launched the first Social Impact Bond (SIB) in the United States in 2012. The program provided cognitive behavioral therapy to youth at Rikers in an attempt to reduce their likelihood of returning to jail. Unfortunately, the new therapy didn’t work to reduce recidivism at Rikers, so the program has ended, and Goldman Sachs and Bloomberg Philanthropies have lost their $7.2 million investment.

Technically, the SIB worked: the program didn’t generate results, so taxpayers didn’t have to pay for it. Of course, we all hoped that the new intervention would have reduced recidivism. However, the pioneering model enabled government to experiment on providing a new and different service that might have led to better outcomes, but without the financial risk. This model of de-risking will hopefully lead to more innovation in provision of services even when government budgets are tight.

There was more positive news out of the UK, where three SIBs returned investor capital. Each of the three SIB partners—Career Connect, Teens & Toddlers and Advisa—met their goals, and investors received a financial return ahead of schedule. The nonprofits worked with Social Finance to improve educational participation for 4,000 teens through a number of activities, including job coaching and after school programs.

Better Outcomes at Lower Cost: Congressman John Delaney’s TEDx Talk on Pay for Success

Congressman John Delaney has been a consistent advocate for Social Impact Bonds and Pay For Success models as a means to address three challenges in government: lack of funding, inability to innovate and insufficient data on social impact. Watch Congressman Delaney’s call-to-action to “put aside the ideological divide” and “stand up for a smarter government” that can “intervene and make a difference in people’s lives but is focused on innovation, fiscal responsibility and focused on new ways of delivering its services.”

Goldman Sachs Asset Management Acquires Imprint Capital

In July, Goldman Sachs Asset Management announced its acquisition of Imprint Capital, an impact investing advisory firm. This acquisition highlights the growing need for impact investing experts within the traditional asset management field and a growing demand for products that consider environmental, social and governance as well as other impact metrics.

Millennial Entrepreneurs Get a Chance to Turn Ideas Into Reality

The Case Foundation is a proud sponsor of the Forbes $1 million Change-the-World Social Entrepreneurs Competition, which will identify and reward young social entrepreneurs leading for-profit and nonprofit social enterprises that address global challenges. This competition presents an opportunity for bright minds under 30 to change the way we approach social issues of our time. If you’re under 30 and changing the world, or you know someone who is, please apply! The deadline is August 26.

Excited about the news and want to learn more about impact investing? Follow our twitter feed @CaseFoundation, and check out the Case Foundation’s A Short Guide to Impact Investing.

Latest Email Marketing Benchmarks and Tips for Nonprofits

 

Email remains one of the most effective communication tools for organizations when they want to engage with constituents, peers, community members and others. But like many of us across sectors, we are not using our email channels as effectively as we could be—and for those of us in the nonprofit sector that is ultimately costing us volunteers, donors, advocates, website visitors and more.

Earlier this week, Laurie Hood, VP of Product Marketing for Silverpop, an IBM Company, presented a webinar titled, Email Marketing Benchmarks: How Do You Measure Up? Hood’s presentation aimed to answer one of the key questions communication leaders consider every time they hit “send” on an email to subscribers—how are your email marketing campaigns performing compared to the average? If asked this about your own email program, would you know the answer? Does it matter?

Hosted by the American Marketing Association, the session was based on Silverpop’s 2015 Email Marketing Metrics Benchmark Study analyzing emails sent by nearly 3,000 brands and 750 companies from more than 40 countries between January 1 and December 31, 2014. The takeaway for those of us in the nonprofit sector and really anyone providing communications through email is that yes, it does matter how your email is performing because the content you share is useless if no one opens what you have painstakingly prepared.

Here are some of the most often used benchmarks when it comes to email marketing that you can use to determine how you measure up:

OPEN RATES

Unique Open Rates: how many people “view” or “open” the email based on whether or not the recipient enables the images in the email or the recipient interacts with the email by clicking on a link.

Overall

  • Mean* = 21.0%
  • Median** = 17.4%
  • Top Quartile*** = 41.3%
  • Bottom Quartile**** = 7.0%

US

  • Mean = 20.7%
  • Median = 16.7%
  • Top Quartile = 40.9%
  • Bottom Quartile = 7.5%

Nonprofits, Association, Government

  • Mean = 27.5%
  • Median = 24.7%
  • Top Quartile = 48.1%
  • Bottom Quartile = 8.0%

Transactional Opens: transactional emails are most often sent by a company, store, vendor or service provider for example, as a follow up to an action taken by the email recipient. Opens for these specific emails are referred to as “transactional opens.”

  • Mean = 44.9%
  • Median = 45.9%
  • Top Quartile = 72.2%
  • Bottom Quartile = 16.6%

By nature of it being a follow-up with an already engaged recipient who trusts the sender the open rates are extremely high compared to when no transaction has occurred. In the social sector, transactional emails often occur after a donation has been made, a volunteer service has been performed or online engagement such as signing a petition has taken place. The follow-up email is often a good place to further engage with your recipient due to the predictable level of engagement shown by the transactional open rate.

 

CLICKS

Click-Through Rates (CTRs): the number of users who click on a specific link out of the total users who viewed the email.

Overall

  • Mean = 2.3%
  • Median = 1.4%
  • Top Quartile = 9.4%

US

  • Mean = 3.0%
  • Median = 1.3%
  • Top Quartile = 9.0%

Nonprofits, Association, Government

  • Mean = 4.0%
  • Median = 2.0%
  • Top Quartile = 11.4%
  • Bottom Quartile = 0.3%

Click-to-Open Rate: of the subscribers who opened the email, how many clicked on a link or image, etc.

Overall

  • Mean = 12.6%
  • Median = 9.4%
  • Top Quartile = 28.7%

US

  • Mean = 11.8%
  • Median = 8.5%
  • Top Quartile = 27.2%

 

LIST CHURN

Hard Bounces: a permanent reason an email cannot be delivered such as a non-existent domain or when a user has blocked your emails.

Overall

  • Mean = .547%
  • Median = .021%
  • Top Quartile = 0%

US

  • Mean = 0.568%
  • Median = 0.260%
  • Top Quartile = 0%

Unsubscribes: when someone chooses to no longer be on a mailing list.

Overall

  • Mean = .130%
  • Median = .021%
  • Top Quartile = 0%

US

  • Mean = .131%
  • Median = .021%
  • Top Quartile = 0%

 

TIPS

Hood also shared several tips to help anyone improve their email communications. I found these three to be particularly helpful when it comes to increasing the success of your email program.

 Tip #1: Make your email as easy to read as possible. The simplest way to do this is to increase the size of the font for the copy. Hood suggests using the following guidelines for font size:

  • Body Copy 14 px+
  • Headlines 22 px+
  • Buttons 44 px by 44 px

Tip #2: Remember to design your email for the devices your readers are using. Hood reminded listeners that in some cases, more than 50 percent of emails these days are being opened on mobile devices. This percentage is only going to increase over time, so be sure to take design for desktop, mobile, etc. into consideration.

Tip #3: Tell your readers what you want them to do – make it obvious! This means making sure your copy is action-oriented and provides readers with a direct and specific call-to-action.

 

One final note—remember, data and benchmarks should be used as a diagnostic tool and taken into consideration alongside elements of design, strength of your list and how active your subscribers are relative to your content, rather than alone or without context.

As part of the Case Foundation’s efforts to improve our own online presence and strengthen our communication channels, we too are taking a look at our own email program and assessing what we can do to improve the experience of our subscribers and future readers. I hope you can also put these benchmarks and tips to use in improving your email distribution!

If you have your own email marketing tips, questions or ideas specific to the nonprofit sector, please share and join the conversation on Twitter using the hashtag #CFBlog.

 

Definitions

  • *Mean – the “average,” derived when you add up all the numbers in your data set and then divide by the number of numbers.
  • **Median – the “middle” value in the list of numbers or data set.
  • ***Top Quartile – the top 25 percent of data, which Silverpop then took the average to determine what the “Top Quartile” was.
  • ****Bottom Quartile – the bottom 25 percent of data, which Silverpop then took the average to determine what the Bottom Quartile was.

 

Social Impact Bonds: Investing in Public–Private Partnerships at the National Level

The Social Impact Partnership Act

With tighter local and federal budgets, how can government more effectively innovate to achieve the public outcomes that Americans desire? One growing trend, both nationally and internationally, is social impact bonds (SIBs). Recently, Congressmen John Delaney and Todd Young, in partnership with America Forward, hosted a briefing on Capitol Hill releasing updates to the Social Impact Partnership (SIP) Act that expands support for SIBs at the federal level. Congressmen Young and Delaney, along with a bipartisan group of co-sponsors, introduced the SIP Act in the House on March 4, 2015 (similar legislation was introduced in the Senate on April 27, 2015, with sponsorship from Senator Orin Hatch). The SIP Act is intended to create federal-level support to help city and state governments leverage SIBs as a way to tackle local community problems with greater efficiency and accountability.

During the briefing, Brian Beachkofski, senior director at Third Sector Capital Partners; Jeff Shumway, vice president of advisory services at Social Finance, Inc.; and Jeremy Keele, executive director of the Policy Innovation Lab at the University of Utah, highlighted a number of SIBs-based projects currently being constructed in cities such as Salt Lake City, Boston, Chicago and Washington, DC.

How SIBs Function

SIBs, despite the name, are not actually bonds. Originally introduced in the United Kingdom, they are a new method of funding social services in a way that promotes outcomes over the number of services provided. One of the primary benefits of SIBs is the increase in efficiencies through private-sector capital and insights that allow government to identify what works before deploying tax dollars on an intervention (full definition). Other benefits to SIBs are the potential to fill certain social gaps, promotion of bipartisan cooperation within government and the opportunity to put tax dollars to work more effectively. (Watch Congressman Delaney’s TEDx Pennsylvania Avenue talk on SIBs.)

SIBs flow chart 7-28-15
Image developed by Third Sector Capital Partners – Pay for Success Mechanics

 

Recent Results

The first U.S. SIB contract recently came to a close, providing the market with some valuable lessons. As a government-contracting model, this SIB proved that through creative partnerships the government could experiment without passing the risks on to taxpayers. While the program did not achieve the desired social outcomes—reducing recidivism rates at Rikers Island prison in New York—the city now has a better understanding of this intervention and can make adjustments in the future.

Continuing the 2014 Momentum

Last year, SIBs gained wider attention following two major milestones—the U.S. National Advisory Board (U.S. NAB) publicly launched in June 2014, and in November 2014 it released a report of recommendations for federal policy on impact investing, Private Capital Public Good. Today, SIBs remain an underleveraged tool; however, the Foundation is excited to witness the progress that has grown from the work of the U.S. NAB. Policymakers around the world are seeing the value of bringing the talent, time, philanthropic will and assets from all sectors together to tackle major social problems.

As a member of the U.S. NAB to the G7 Task Force on Impact Investing, Jean Case has been an advocate for the powerful potential and virtues of this “all oars in the water approach to solving society’s most intractable obstacles. By engaging private investors through both their immense capital assets and talent, we at the Case Foundation believe that governments and service providers will have the support to realize big, measurable gains on the issues communities care about most.

We look forward to more progress and to a future with more innovative government funding for measurable outcomes and impact.

Celebrating Inclusive Entrepreneurship at White House Demo Day

American innovation has long been the envy of the world. Throughout our country’s history, thanks to our free enterprise system, people from all walks of life have brought forth innovations that benefited society broadly—in all sectors such as energy, transportation, health care and more. These innovations often came about from those who “lived the problem” and dreamed great solutions that could benefit the masses. These were entrepreneurs who built young enterprises to bring their products and services to market and who often changed the world in the process.

Today, we need to ensure that American innovation isn’t simply about providing more convenience for the privileged—such as easier hotel bookings, more and comfortable ways to get from point A to point B or same-day delivery of groceries from an upscale market. To build solutions for the future, we need to move beyond the “app culture” and engage a new class of entrepreneurs—many who have lived real problems and are building real solutions to the challenges in our communities, and around the globe. But in recent years, this segment of entrepreneurs has often been left on the sidelines of innovations, with no steady flow of capital, mentorship or celebration focused on them.

It is well known that the vast majority of today’s celebrated startups continue to be founded by white, well-educated, well-networked males. And while we celebrate all startups and new innovations—we are underleveraged as a nation if those in more marginalized communities are left on the sidelines. There is, for instance, immense potential for women, people of color and those who don’t live on the coasts or graduate from our nation’s most elite schools. Women are leading 36 percent of all businesses in the U.S., but only receive 10 percent of venture capital funding. Minority-owned businesses are growing at a faster clip than non-minority owned businesses, but are receiving an even smaller fraction of investments. Seventy five percent of venture capital today goes to three states—California, New York and Massachusetts. There is a growing realization that this has to change, including at the highest levels in our nation and among those who are driving this change.

For example, today in New Orleans, PowerMoves, a minority-focused incubator, is backing young enterprises that reach across socio-economic barriers to bring opportunities to those often the last to benefit from innovation. In the first year of operation, PowerMoves worked with 87 companies to create 350 jobs in New Orleans and Detroit. Because of PowerMoves’ work, these companies were able to secure $14M in additional capital commitments to high growth, high tech startups led by entrepreneurs of color. Crystal McDonald, a PowerMoves entrepreneur, developed GoToInterview, a service to connect hourly workers with companies that have demand for them, and won the Rise of the Rest pitch competition in New Orleans.

And there are many more examples of entrepreneurs from underrepresented populations that are seeking solutions to problems that benefit all, like Pashon Murray, a dynamic entrepreneur of color in Detroit. Inspired at an early age by her father’s waste hauling company, Pashon turned family knowledge into a scalable business that takes food waste from companies, including General Motors and the Detroit Zoo, and transforms it into rich soil for local farmers to enhance crop productivity and create jobs. For Pashon, it’s not just about the hauling of waste—she is also a fellow at the MIT Media Lab studying the science of composting and waste reduction. She is combining science, engineering, the needs of a community and her entrepreneurial spirit to create a viable, scalable business in Detroit.

The opportunity to tap into the potential of these entrepreneurs is top of mind for us at the Case Foundation, and why we are delighted that today, the White House will host its first ever Demo Day, with a focus on inclusive entrepreneurship—bringing together entrepreneurs from all walks of life and from all across the country. We look forward to joining President Obama today in a commitment to see “more startup hotbeds emerge in every corner of America, and that those underrepresented in entrepreneurship are being tapped to fully contribute their entrepreneurial talents.”

In fact, here at the Case Foundation, we’ve long believed in the potential for unleashing entrepreneurs—and entrepreneurial approaches—as a clear path for making the world a better place. Over the past 18 years, we’ve developed and supported a range of initiatives—many of them in partnership with the White House, with Presidents of both parties—that put entrepreneurs in the middle of solving big problems, from the West Bank to Detroit, from DC to Nairobi. These initiatives include the U.S.-Palestinian Partnership, an effort to bring entrepreneurship opportunities to the West Bank that I was asked to co-chair in 2007 by President George W. Bush, and the Startup America Partnership, focused on celebrating and accelerating entrepreneurs here in the U.S., which we launched in partnership with the Kauffman Foundation and the Obama administration in 2011. More recently, our focus has shifted to an effort to unleash new capital for entrepreneurs building businesses that seek to address significant social challenges, through our work to catalyze the burgeoning impact investing movement.

Our efforts to support entrepreneurs and the role they play in driving innovation and job growth in the U.S. and around the world have certainly been rewarding. But in the past year, we began to ask ourselves, what role can entrepreneurship play in bringing new opportunities to those left on the sideline? How can we level the playing field for underrepresented communities—including women and people of color—to become entrepreneurs and grow thriving businesses? And how can we facilitate the creation of more businesses that address the challenges that marginalized populations are facing? To help us answer these questions, we began an exploration at the beginning of the year into potential opportunities for inclusive entrepreneurship, and funded two organizations doing important work in this space—Forward Cities and Opportunity Nation. We also joined the most recent Rise of the Rest tour, supplementing the visits to Richmond, Raleigh-Durham, Charleston, Atlanta and New Orleans with conversations focused on how to expand entrepreneurship as an opportunity for all. And we just returned last week from exploring these topics on a global scale during a trip to Africa, focused on exploring burgeoning entrepreneurial ecosystems in Kenya, Ghana and Nigeria.

We are committed to expanding our support for inclusive entrepreneurship, and in the coming months you will hear more from us on our efforts to build upon the momentum from national conversations around diversity, reduce common barriers to entrepreneurship faced by diverse entrepreneurs and scale local pilots into national programs serving women and entrepreneurs of color.

We have a tremendous opportunity today to tap into the uniquely American legacy of leveraging entrepreneurs to grow our economy, strengthen communities and solve intractable problems. But we’ll never recognize our full potential if we don’t focus on ensuring that we give all people—no matter their gender, ethnicity or economic background—the opportunity to be a part of growing entrepreneurial ecosystems, and tap their unique experiences to solve significant challenges. Imagine what is possible when we have a full team and all fields in play!