You’re Ready to #ShareYourData…. Now What?

Over the past six weeks, we have been sharing an initial look at the Beta version of the Impact Investing Network Map that the Case Foundation has been building. This started with a call to action that many of you heeded, leading to wonderful excitement and feedback about the Impact Investing Network Map and its potential to better understand the Impact Investing landscape. We are thrilled with the feedback we have received from investors, entrepreneurs and others in the space who share the Case Foundation’s belief that standardized data and publicly accessible information are vital for driving Impact Investing to scale. But there’s still more you can do.

So what is the next step? Many of you have asked important questions around submitting your data for inclusion on the Network Map, like:

  • What data should you share?
  • Where can you share that information?
  • And how can you make sure that your impact organization and investments show up accurately on the Impact Investing Network Map?

With two critical weeks left in our Data Campaign, we want to equip you with all of the information you need to turn your intention into action. 

So what data should you be sharing?

For the Beta version of the Impact Investing Network Map, all of our data is pulled in from our partners —ImpactSpace and Crunchbase. ImpactSpace hosts the largest public Impact Investing dataset and have been a longstanding supporter of data transparency to propel the Impact Investing movement to tipping point. We’re pulling data directly from ImpactSpace through their API, which updates the Network Map on a weekly basis.

The data that we pull in features two types of information on investors and companies—biographical and transactional.

  • Biographical data includes basic details like the intended social, environmental and operational impact (Impact Objectives); geographic focus of that intended impact (Impact Geography); headquarter location; organizational structure and Impact Investing relevant certifications.
  • Transactional data relates to capital raised at the company level. Specifically, this includes the different fundraising rounds from Seed to Series C+; the overall size of each round; investors that participated in the individual round and the basic structure of the investments.

If you’re interested in being included on the Network Map, you can share any or all of the data mentioned above, whatever your organization is comfortable with. At this early stage, we’re not yet capturing performance information, but we are working with partners and experts in the field to understand the most responsible way to include this type of reporting. In the meantime, we hope you’ll look at what level of biographical and transactional data you might be willing to share.

Where and how do you get your data into the Network Map?

The process of submitting your data to ImpactSpace is simple. Go directly to ImpactSpace with your biographical and/or transactional information in tow. Check out this simple upload guide for more information on how to upload your data. ImpactSpace has a 48-hour review period for new data to be approved and included on their website, and the Network Map draws updated information from ImpactSpace on Sunday evenings.

How can I edit or update my existing data so it’s accurate on the Network Map?

If some or all of your information is already in the Network Map, but is slightly out of date or you’d like to add additional levels of detail, you can click edit on your Network Map profile, which will take you to your page on ImpactSpace. You can also go directly to ImpactSpace to update your profile information. Once you’ve arrived at your ImpactSpace profile select Edit under each appropriate section. There is a 48-hour waiting period for entries to be approved, and you’ll receive a confirmation email upon approval.

Get started TODAY!

More than 1,000 impact investors, entrepreneurs, field builders and others interested in learning more have visited the Network Map since our campaign launched a little over a month ago. Our Network Map Champions have taken the early step to join us in the call to action to #ShareYourData, and you can too. We hope that you will join leaders in the Impact Investing field to commit to some level of transparency as a way to serve the development of a more robust and powerful Impact Investing movement. Head over to ImpactSpace and #ShareYourData, then become an active Network Map tester and let us know how we can improve the platform to build a stronger tool to support your work!

Is your data on the Network Map?
Let us know using #ShareYourData

A Seat at the Table

This article is contributed by Rehana Nathoo, VP of Social Innovation at the Case Foundation; Will Jacobson, Director of Business Development at Microvest; and Ben Thornley, Managing Partner at Tideline. The following was created based off of a panel discussion the three of them presented at Institutional Investor’s Senior Delegates Roundtable during the Fixed Income Forum.

Attend an investment conference these days and Impact Investing is part of every agenda. Sometimes it’s a panel of industry experts debating the necessary conditions for institutional-quality product development. Other times it’s the wildcard, pre-cocktail discussion of what impact means and how to measure it.

At a recent convening in Los Angeles last month, the three of us embraced the opportunity to lead a conversation on Impact Investing.

Impact Investing continues to grow rapidly, propelled by a range of actors interested in making a positive contribution. All the while still generating profit. Some Institutional Investors are doing their part to bolster the creation of solutions to urgent social and environmental challenges. But all of these efforts are happening in a fragmented fashion, and in small pockets of activity. This leads us to believe that with the trailblazing efforts of these early innovators, it’s time for traditional investors to jump in.

As with many nascent markets, the first Impact Investing products faced significant roadblocks. This style of investing was different, the breadth of managers who were well versed in the space was sparse, and benchmarks were non-existent or unrecognizable. But in the same way the sum total of carbon emitted in the production of the first Tesla Roadster hardly answered the call for environmental stewardship, there was immeasurable value in laying the groundwork for a paradigm shift. One that would see half of all cars in 2040 be electric.

Impact Investing can be at the helm of a similar global systemic change in the way we think and the way we invest. As the space has evolved, so too has the caliber of managers. DBL Partners has delighted many investors. TPG, Bain Capital, Morgan Stanley, and Blackrock have developed and established impact-oriented products and platforms away from the cocoonery of their CSR departments. And last we checked, none of these firms, funds, or managers are in the concessionary returns business.

Recent controversies, not least in Silicon Valley, show that the days of separating action from consequence are coming to an end. Historically, investors haven’t necessarily had to think about the specific, non-financial outcomes of their investment decisions. But getting educated on Impact Investing, and formulating a response, will provide an important on-ramp for what may ultimately become the future of all investing.

In the spirit or getting educated and moving to action, here are some core principles to keep in mind:

Be clear on your intention

It’s almost always possible to turn impact into action. Contrary to the scarcity myth, most impact “themes” are in fact investable. A general commitment to measurable economic development in the US, for example, may yield a range of products that support small business development in underserved parts of the country. A passion for changing the gender gap in business ownership, or course-correcting the global water scarcity are all focused, specific, and actionable. The more clarity investors have on their intentions, the easier it will be to find or develop investment opportunities for the problems they hope to solve.

Be specific with your objectives

Because Impact Investing is defined by the pursuit of “intentional” social and environmental outcomes, it would pay to develop a better understanding of what motivates the investment. Intentions of the actor are important, but so is the intended outcome of the investments. Is supporting a particular place important, as Newark is to Prudential? Or is it a particular theme or objective that motivates you, like investing in new products working to solve climate change across the globe? Being specific with a fund’s impact objective can help new investors see their place in that investment.

Be action-oriented

Perfect is no longer the enemy of the good. The field is increasingly embracing a broader definition of Impact Investing and lauding efforts to make important improvements in the totality of a portfolio’s impact. Relatedly, while Impact Investing also requires that hoped-for outcomes are measured, perfect rigor is less important than a commitment to putting in place a responsible, transparent process. The ethos of transparency is one of the reasons we’re seeing consistent thought leadership in onboarding new investors, the development of the Beta version of the Impact Investing Network Map and a multitude of other efforts.

We know that Impact Investing still has ample room to grow. We need stronger and longer track records, an increased culture of transparency and disclosure, responsible market segmentation, and greater clarity on what it means to create impact at different parts of the investment value chain—for asset owners, asset managers, and their investees. But it’s not too soon for traditional investors to take a closer look, and keeping the above principles in mind will help activate your impact investing journey today.

Another Policy Win for Impact Investing

This week marks another important moment in the growing global impact investing movement, and an important reminder of the critical role that government policy can play in catalyzing social progress.

In response to a 2013 call from G8 leaders for nations to designate Task Forces that would work together to identify policy recommendations to accelerate the growth of impact investing, the U.S. National Advisory Board (NAB) on Impact Investing was formed. This incredible group of cross-sector changemakers, including our own CEO Jean Case, presented its recommendations in the summer of 2014 at the White House in the form of a report—Private Capital, Public Good. The report zeroed in on a number of key policy changes that held the potential to significantly increase the amount of capital available for socially responsible business. And over the past two years, in strong partnership between the private sector, philanthropy, civic leaders and government, those recommendations are being adopted through policy change.

From Mission-Related Investment (MRI) regulations issued in September, 2015, to new Employee Retirement Income Security Act (ERISA) regulations issued in October, 2015, to last week’s issuance of new Program-Related Investment (PRI) regulations, the U.S. government has listened to stakeholders and taken action to remove uncertainty about impact investing among capital providers (foundations, charitable organization and private investors alike) wishing to invest for both financial and social returns.

The Latest Policy Win: PRI Regulations

This week, the Treasury Department and IRS finalized highly anticipated PRI regulations. This new guidance removes some of the uncertainty about impact investing among foundations by confirming new examples of the types of investments that qualify as PRIs. These examples were recommended in 2012 to modernize the list created more than 40 years ago, and identify foundations using PRIs to further their mission through:

  • Different financing methods, including equity, debt or loan guarantees—as is frequently the case in Pay for Success models.
  • Greater flexibility in determining a prudent, mission-aligned exit from an investment in a for-profit company that has become profitable.
  • Investments in both for-profit and nonprofit organizations and even to individuals through, for example, microloans in developing economies.
  • Strategies that aren’t limited by geography or charitable purpose—PRIs can go to support the arts, the environment, health, urban development and more, both within the U.S. and internationally.

This new guidance is very welcome news. Historically, limited PRI examples left many foundations that wanted to take advantage of PRIs to support their charitable efforts on the sidelines. They questioned what was “allowable,” given their unique tax status and the changing landscape of investment seeking social enterprises and revenue generating nonprofits. At a time when our communities are in great need and traditional resources are being stretched thin—we need the power of all sectors working together, and PRIs provide foundations with a powerful tool to make that happen.

We Know These Kinds of Policy Changes Can Matter

We’re encouraged by the recent steps taken by the federal government, knowing that their actions can, and have, greatly influenced market activity. If we think back to 1979, the U.S. government issued highly impactful guidance on the prudent management of pension funds—stating that investments in venture capital funds could be consistent with ERISA guidelines. Directly following this guidance, venture investment in the U.S. jumped from just over $450 million in 1979 to a peak of $5 billion by 1987, effectively catapulting venture investments into the mainstream.

Taken together, the MRI, PRI and ERISA policy changes remove obstacles (or excuses) that have stood between good intentions to seek out impact investments and action. Even a relatively small percentage increase in pension fund impact investments would add up to billions in new capital—funds governed by ERISA manage roughly half of the $18 trillion in US pension assets. And on the PRI front, a Center for Effective Philanthropy report points to the great potential to scale impact investing—of the 64 foundation CEOs surveyed, only 41 percent said their foundations are making impact investments. Of those who are, they are deploying a median of only two percent of their endowments and 0.5 percent of their grants to PRIs.

At the Case Foundation, we believe we’re on the verge of seeing impact investing gain traction like never before. The impact investing road has been further paved by this latest policy change—let’s make that road paved more with robust actions than good intentions!

For more on the new PRI regulations, visit the White House blog post: Steps to Catalyze Private Foundation Impact Investing.

Photo credit: Roman Boed