Month: January 2017

2016 Year In Review: A Look at How Far Impact Investing has come…And Will Go

Posted on by Case Foundation

In mid-December, the New York Times reported on the launch of a new impact investment fund, RISE. RISE, a fundraising effort overseen by TPG Growth, is engaging philanthropists, venture capitalists, investors and development proponents alike in the quest to pursue rigorous financial and impact goals. The $2 billion effort—one of the largest of its kind—is yet another empowering sign that more mainstream investors—and their clients—are looking to Impact Investing as a viable opportunity to pursue a range of material returns.

While this announcement creates continued confidence around the momentum in this space, the article references a supposed laziness of Impact Investing efforts to-date. Most notably failed experimentation, relaxed expectations on returns (social or otherwise) and the sacrifice of charity. But that criticism, while valid in the early days of the movement, doesn’t ring true today. In fact, in the last two years alone, a combination of diverse engagement, deeper performance tracking and diligent impact measurement is driving Impact Investing from a niche to mainstream strategy.

Three observations in particular encourage us on the way forward, and should be more heavily featured in the overall Impact Investing narrative:

  1. Market size and opportunity indicates the potential for real growth

In 2016, the Global Impact Investing Network (GIIN) estimated that 157 respondents committed USD $15.2 billion toward impact investing, with 7,551 total investments tracked during the year. In the 2015 report by the same group, 146 respondents committed USD $10.6 billion, with a total of 5,404 impact investments tracked.

The number of investments and the number of engaged investors continues to increase year over year. Strong platform and product development by financial institutions like BlackRock and Prudential, expansive divestment efforts by the Rockefeller Brothers Fund and impact investments by historically “traditional” venture capitalists like Mark Andreessen indicate that “niche” is no longer an appropriate qualifier.

But, we’re not home yet. The continued growth of Impact Investing will require a lot more catalytic capital brought to bear through varied instruments across the risk/return spectrum. It will also require new thinking around expectations, goals and tools—moving past traditional norms around investment behavior.

  1. Exit tracking and performance indicates the potential for real returns

Across the field, varied definitions of “Impact Investing” have slowly merged into a more common set of principles. Often used to exclusively describe private investment activity in key geographies and sectors, Impact Investing now spans multiple investor types and asset classes. The bulk of historical activity, however, continues to include investments into companies and funds, and funds remain a predominant choice. Particularly for large investors, first time LPs, and organizations looking to co-invest with peers, this vehicle allows investors to learn, explore and meet their goals together.

The pressure for General Partners (GP) to find liquidity in their funds and generate a sizable return for their LPs means that exit performance dominates the conversation. For impact fund managers, according to a Wharton Social Impact Initiative report, that pressure is even more intense given how little track record, performance management and all around evolution we can point to for such a young industry.

But that track record is building. Cambridge Associates, in partnership with the GIIN, conducted research to determine performance within private equity and venture capital impact investment funds. Their analysis covered 51 private funds launched between 1998 and 2010. Findings indicate that impact funds outperformed comparable non-impact funds. At the $100 million fund size and below, impact funds realized returns of 9.5% (IRR) compared to non-impact funds which achieved 4.5% (IRR). Impact funds underperformed non-impact counterparts at differing fund levels and in certain regions, though performance in emerging markets (particularly across Africa) was stronger.

Continued quantifiable analysis such as this is critical in hammering home what the research shows—that impact investments are not inherently concessionary. Understanding where Impact Investing is most successful, where it’s not and how it has evolved in a short period of time are all equally important elements of successfully talking about this space.

  1. Sophistication around the articulation and measurement of social objectives indicates the potential for real impact

Early criticism of Impact Investing focused on a lackluster process for prioritizing and/or measuring social impact. Either the framework was absent, or the rigor of measurement was missing altogether. Since formalization of the term in 2007, various groups have been working to increase the sophistication of the tracking and articulation of non-financial objectives. The IRIS standards, GIIRS ratings and B Impact Assessment are just a few tools that help us to determine what to measure, what that means and how to compare our performance across similar benchmarks.

But the proliferation of these tools also requires real adoption. In the 2016 GIIN survey previously referenced, respondent activation increased in standardization across IRIS, integration of impact measurement across investment teams and integration of impact performance into decision making.

Investors have often been urged to clearly articulate and track their goals around social impact, but those metrics have been under-developed, prohibitive or clunky. As the articulation of social impact objectives becomes increasingly sophisticated, the actual monitoring of performance across indicators will also improve. This early data demonstrates that we have a long way to go, but consideration of impact objectives is an important part of the broader performance conversation.

As the field continues to develop around terminology, performance measurement and the growing market opportunity, we are excited about the potential for even more capital to flow into the Impact Investing space. In our work, we’ve seen increasing commitment on all fronts to further develop the field in a way that enhances the ability of Impact Investing to meet its full potential. It is our hope that continued rigor and sophistication will get us one step closer to tipping point.

Biggest Trend in Social Good? Women in the Driver’s Seat!

Posted on by Case Foundation

I was recently asked to open up a dinner conversation with a room full of social innovators—a mix of foundations, entrepreneurs, impact investors and companies—by laying out what I saw as the top three trends in social good. These trends are important in that they inform our arenas for action and the clarion call we, at the Case Foundation, are making to all citizens to “Get in the Arena.” That night, I picked three distinct trends because I felt it opened up more conversation. In hindsight, I wish I’d gone with my original three: women, women and women. 

Trend 1: Women as Investors

You may recall an earlier blog I wrote about Trailblazing Women in Impact Investing where I talked about women emerging as a driving force behind the growth of the Impact Investing industry. From founding firms focused on impact investors, to creating tools and products to catalyze capital, to leading nonprofits and foundations focused on educating and activating a host of actors, women are spearheading and populating this sector more so than any other financial services sector.

A recent Calvert Investments report asserts that women, along with younger investors, will indeed drive the growth of the broader responsible investment industry. In a study of affluent women, 95 percent ranked “helping others” and 90 percent ranked “environmental responsibility” as important. And beyond driving the growth of Impact Investing, woman may be our greatest hope to unlocking the kinds of game-changing innovations required to solve the most persistent problems. Turns out that women wealth holders exhibit more risk tolerance toward new and innovative solutions, once they have met the financial security needs of themselves and their families. As Sallie Krawcheck wrote in her thought-provoking piece, women investors exhibit a slightly different values-based perspective. More women want their investments to not just generate excellent returns, but also have a positive impact on the world they live in. And they’re willing to make some big bets to deliver on that perspective.

This data reinforces the importance of ensuring that women continue to be aware of the momentum in the Impact Investing space. Remember, their purchasing power and, therefore, their potential social impact power is enormous—women control 39 percent of investible assets in the U.S. today. That number will continue to rise; women currently control 51 percent, or $14 trillion, of personal wealth in the U.S. and are expected to control $22 trillion by 2020.

Trend 2: Women as Consumers

Women represent the largest market opportunity in the world. Globally, they control $20 trillion in annual consumer spending. In the next five years, it is expected that this number will rise to nearly $30 trillion. For context, that is more than the two largest growth markets typically identified—China and India—combined! In the U.S., women control somewhere between $5-15 trillion, with estimates that they will control two-thirds of the consumer wealth in the U.S. over the next 10 years.

Women handle the bulk of purchasing decisions for everyday items like groceries and clothing and are also heading up and/or highly influential in large ticket purchases like cars, homes and appliances. Here’s another kicker—they even purchase 50 percent of the products marketed to men!

Why is this a trend worth watching in social good? Because women often make purchasing decisions based on their personal and social values. The HBR piece on the “Female Economy” is a must-read on the role women will play as consumers, members of the workforce, productivity drivers and caregivers. On the women as consumers front, my favorite quote:

“Once companies wake up to the potential of the female economy, they will find a whole new range of commercial opportunities in women’s social concerns. Women seek to buy products and services from companies that do good for the world, especially for other women. Brands that—directly or indirectly—promote physical and emotional well-being, protect and preserve the environment, provide education and care for the needy, and encourage love and connection will benefit. And women are the customer. There’s no reason they should settle for products that ignore or fail to fully meet their needs, or that do so cynically or superficially. Women will increasingly resist being stereotyped, segmented only by age or income, lumped together into an “all women” characterization, or, worse, undifferentiated from men.”

Given the forthcoming wealth transfer predicted, many of these upwardly mobile consumers and asset owners are Millennial women. Millennial customers, employees and importantly—entrepreneurs—lead their lives and make choices with a more holistic worldview. They contribute to and support the things they believe in and they use their dollars to exercise those views and beliefs.

Trend 3: Women as Entrepreneurs

And perhaps the greatest trend of all to watch in terms of opportunity to drive social good is the rise of women in entrepreneurship.

American Express OPEN’s 2016 State of Women-Owned Business report is a must-read. The number of women owned firms and their economic contributions continue to rise at rates higher than the national average. As of 2016, this data shows 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues.

The report show that between 2007 and 2016:

  • The number of women-owned firms increased by 45 percent, compared to just a 9 percent increase among all businesses. That’s five times faster than the national average.
  • Their employment growth increased by 18 percent, compared to a 1 percent decline among all businesses.
  • Their business revenues increased by 35 percent, compared to 27 percent among all U.S. firms. That’s 30 percent higher than the national average.

And check out the growth of firms owned by women of color! Their numbers have more than doubled since 2007, increasing by 126 percent.

Now, let’s turn our attention to venture-backed companies in particular, given their potential for high growth. Less than 10 percent of venture-backed companies have female founders, despite the evidence that gender-diverse companies drive greater market returns and innovation; that VC portfolios show women-founded companies outperform those founded by men; and that funds declaring gender diversity an “investing factor” give higher returns with women at the leadership level.

I think we are going to see these dreadful statistics change over the next couple of years. Increased attention being paid to these numbers, including by our own #FacesofFounders campaign and others (UBS, Blackstone Foundation, Google for Entrepreneurs, Kapor Center, 500 Startups, JumpStart, to name just a few) will help. Why is this a social trend worth accelerating? To put this into perspective, according the Economist, if women entrepreneurs in the U.S. started with the same capital as men, they would add 6 million jobs to the economy in five years—2 million of those in the first year alone.

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As we ring in 2017, with all of its uncertainties, I for one commit to getting in the arena of investing in women with intention. For one thing appears pretty certain—our economy, as well as our social fabric, depends on them.

Jean Case at TEDxMidAtlantic: Unlocking the American Dream

Posted on by Case Foundation

Case Foundation CEO Jean Case took the stage at TEDxMidAtlantic: New Rules—a gathering of 45 prestigious leaders who came together to discuss and think about what kind of society and future we want to build, and how we get there. Jean’s talk noted the importance innovators have played in the history of the United States, examined the state of entrepreneurship today and promoted a series of changes we could make to open the doors of entrepreneurship to everyone.

Jean shared the true but often surprising statistics that show that women and entrepreneurs of color are too-often being left on the sidelines, but contrasted them with her vision of a world where all innovators and change makers were on a level playing field. While she recognized that there are still many challenges facing women and entrepreneurs of color involving unconscious bias, she called on investors to take a hard look at their portfolios and the opportunities they were missing by not tapping into the rich talent of diverse entrepreneurs. Standing on the iconic red TED carpet, Jean set forward a clarion call for all to join in on building an inclusive entrepreneurial ecosystem that would give everyone an equal chance at unlocking the American Dream.

Watch Jean’s TEDx talk below to learn more about the realities for women and entrepreneurs of color today, and how we can help change the face of who is and can be an entrepreneur.

 

It’s Time to Get in the Arena

Posted on by Case Foundation

2017 is a special year for us at the Case Foundation. It marks the 20th anniversary of an idea that has continued to drive and inspire us in all that we do—investing in people and ideas that can change the world. Over the last two decades, with this vision, and in collaboration with a vast array of parties, we have been proud to contribute to, inspire and champion the incredible progress that has moved people and organizations from intention to action. From clean water and the digital divide, to increased opportunities for service and civic participation, to impact investing and inclusive entrepreneurship, we have worked with others to catalyze efforts to create transformative change. 

Over the past 20 years, philanthropy and the social sector has witnessed incredible progress. We believe that leveraging the power of the entrepreneurial spirit and technology to help solve the world’s most challenging problems is a key ingredient to this progress, and, as we kickoff our 20th year, we remain committed to ensuring this focus is at the center of all our work. At the same time, our experience over the past 20 years has taught us that addressing these challenges through true collaboration amongst diverse actors and smart partnerships is much more effective than fighting alone, and therefore we commit that collaboration will continue to be a hallmark of our work in the days ahead.

Through all of these experiences we have learned a great deal and recognize that the lessons learned will both inspire and inform our future. As we look back, it’s hard not to see that the common key to all of our efforts has been pushing ourselves and others to challenge assumptions and take risks. We have challenged ourselves and others to get off the sidelines and “get into the arena” to address our most pressing challenges.

This is not a new idea of course, but it resonates more in the context of today’s world than perhaps ever before. Citizen engagement has been a hallmark of successful democracies for centuries and is core to our mission. In 1910, Teddy Roosevelt gave a speech known as, “The Man In The Arena” that captures this fundamental belief in citizen engagement: 

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

As we welcome 2017, Teddy Roosevelt’s words still ring true. And we can think of no better time than now for each of us to identify ways we, personally, can heed his call and “get in the arena” to make a positive impact in our communities. That is why we are dedicating our 20th Anniversary year to calling on all to “Get in the Arena.”

Throughout 2017, we will be bringing forward ideas, stories and events that highlight people and ideas that can change the world using the hashtag #GetInTheArena. We hope you will join us and share with us your own vision of what it means to take action on the issues and challenges that matter the most to you and your community. For those wondering when it is the right time to jump in, the answer is now. For those already in the arena, we hope you’ll engage in new ways and inspire others to jump in as well.  

Our Most Popular Blogs of 2016

Posted on by Case Foundation

As we kick off the new year, we are taking a look back at our most popular blogs from 2016 to revisit key moments that inspired us here at the Case Foundation. We’ve collected the 10 most popular pieces—as determined by our community of readers. These blogs represent our areas of work in catalyzing movements and inspiring ideas that can change the world. We hope thes will remind us all to be bold, take risks and fail forward together around the issues you care most about in the coming year!

  1. Our Fearless Journey From Mission to Movements, by Jean Case

2016 was a year of transition for many, and the Case Foundation was no different. In August, our CEO Jean Case wrote about the journey we have taken from mission to movements, and how—as we have taken a journey of self-exploration and come to better understand our work & DNA—the Case Foundation has reframed our work. We’ve always been in the business of transformative change, but have come to realize that our real “special sauce” is that we use a Be Fearless approach to catalyze movements around social innovation and tip the scales form intention to action.

  1. Words Matter: How Should We Talk About Impact Investing?, by Jean Case

In March, our CEO Jean Case joined partners from Omidyar Network, Ford Foundation and MacArthur Foundation, together with the Global Impact Investing Network and the Global Social Impact Investing Steering Group, to unveil research that tracked and analyzed coverage of the topic of impact investing in traditional and social media and shared insight into how the way we talk about impact investing can play a powerful role in informing, educating and activating people around the movement.

  1. Trailblazing Women in Impact Investing, by Sheila Herrling

2016 was a year of momentum for Impact Investing. From the Treasury Department and IRS’s release of new PRI regulations, to high profile new social impact funds like TPG’s $2 billion Rise fund, it’s evident that the movement is picking up steam. And another noticeable trend has stood out: women are emerging as a driving force behind its growth. In August, our SVP of Social Innovation, Sheila Herrling, wrote what would go on to become our second most popular blog post of the year, highlighting these trailblazing women in Impact Investing. We can’t wait to see the momentum continue in 2017.

  1. The 2016 Millennial Impact Report – Phase 1, by Emily Yu

One of the hottest topics of 2016 was the election, so it is not surprising that on of our top blog posts of the year was about our Millennial Impact Report, which looked at how Millennials were engaging with the election and how the election effected their cause engagement. Among our top blogs was also “Millennials Cast Their Vote For Cause Engagement,” another post on the Millennial Impact Report, this time about Phase 2.

  1. 2016 Conferences On Our Radar, by Jade Floyd

2016 was an action packed year for the Case Foundation, and much of the great momentum we saw this year was fueled by wonderful in-person interactions at conferences and convenings. From SXSW, to SOCAP, to crisscrossing the country for #FacesofFounders activations at the White House, the New York Stock Exchange, Forbes 30 Under 30 Summit, Google’s headquarters and more, we loved getting the chance to reach beyond our bubbles and meet so many changemakers face-to-face. Keep an eye out for our upcoming list of 2017 Conferences On Our Radar.

  1. Twitter Lists:

We’ve loved the conversations we have and information we learn from the engaged social impact communities on Twitter. In 2015 we started a series of Twitter lists to help people join in these conversations and better know who to follow to find out more about topics we care deeply about. Several of these lists made it into our top blog posts of 2016:

  1. The Myth of the E-Word, by Sheila Herrling

Our Myth of the Entrepreneur series was started in the fall of 2015 to take a critical look at the common stories and myths told in startup culture, and as it continued into 2016, it was clear that the myths were striking a chord with our readers. The Myth of the “E Word” post contemplated the term “entrepreneur” itself as a possible barrier to expanding and diversifying entrepreneurship. “The Myth of STEM; The Only Way,” and “The Myth of the Coasts” also found their way into our top blog posts this year. We look forward to busting more myths in 2017 that are holding us back and breaking down barriers to entrepreneurship faced by women and entrepreneurs of color.

  1. One Fearless Question that Paved the Way for Women in Government, by Jean Case

On International Women’s Day, our CEO Jean Case shared a story about the fearless trailblazers Vera Glaser and Barbara Hackman Franklin. Vera Glaser’s #BeFearless question to President Richard Nixon questioning why more women were not a part of his cabinet set off an effort, headed by Barbara Hackman Franklin, that changed women’s access to high-level appointments in federal government. Our readers also enjoyed other Be Fearless examples that made it into our top blog post lists, such as our spotlight on the Robert Wood Johnson Foundation and Jean’s blog post “Confronting Risk in Today’s Nonprofits.” You can learn more about how to Be Fearless in your pursuit of social good on our Be Fearless Hub.

  1. What’s Trending—Using Your Business as a Force For Good, by Sheila Herrling and Hardik Savalia

We are proud to partner with B Lab and their ground breaking work to help businesses identify and measure their social impact, and through the popularity of this blog post, it is clear that our readers are also excited about the potential of the B Impact Assessment. We’re excited that the Assessment can help all businesses, not just certified B Corps, to join the movement to redefine success for business, and measure their ability to build stronger communities, create environmentally sustainable operations or cultivate empowering employment opportunities.

  1. Innovation Madness: Elite Eight, by Jessica Zetzman

In conjunction with the NCAA Tournament, the Case Foundation decided to put our own twist on March Madness and introduced Innovation Madness, a celebration of Women’s History Month and the women who have been influential innovators in exploration, business and the STEM fields—yet are not recognized as often as their male counterparts. Our whole staff got in on the fun, chosing their favorite innovators, and we loved that hundreds of people voted and participated in Innovation Madness on social media. Check out the original bracket, the Elite Eight, the Final Four and the Champion.

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We are thrilled that these blog posts resonated with our readers in 2016, and look forward to continuing great conversations on and offline in 2017. Tell us what you want to read more about by using #CaseBlogs on Twitter.

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