On September 6th, 2019, IEN organized the ESG & Community Impact Investing Roundtable at the Haas School of Business at the University of California, Berkeley. The half-day event brought together a diverse group of endowment decision-makers, investment firms, nonprofit leaders and other stakeholders looking to enhance environmental, social, and governance (ESG) integration into their investment process to positively impact communities near their campuses and around the world.Read more
Community impact investing can be a powerful tool to redirect capital into our own backyard. Reinvesting in our communities can generate many benefits especially for anchor institutions such as foundations and endowments, including the creation of prosperous and thriving neighborhoods in which they work and the development of relationships with local communities.
IEN’s half-day roundtable on Community Impact Investing on June 11, 2018 at the Boston Foundation convened more than 70 endowment and foundation decision-makers along with other stakeholders interested in working closer with their local communities. The interactive structure of the roundtable allowed participants to learn not only from distinguished panelists but also from others in the room with years of experience in this field.
Panel 1: What is Community Investing?
In the first panel, we explored the definition of community investing with panelists Deborah Frieze (Founder and President, Boston Impact Initiative) and Elyse Cherry (Chief Executive Officer, Boston Community Capital), facilitated by Tom Mitchell (Managing Director, Cambridge Associates). Discussions centered around the power of community investing in the context of increasing wealth disparity in this country, the possibility of earning a market-rate financial return while generating positive impact in local communities, and the idea of leveraging a spectrum of asset classes to generate social and financial returns investors require.
Panel 2: What Might Community Investing Look Like for a College Endowment?
The second panel facilitated by Kate Dumas (Principal/Consultant, Prime Buchholz) invited Erik Gross (Board Treasurer, UNH Foundation) and John Hamilton (Vice President of Economic Opportunity, New Hampshire Community Loan Fund) to illustrate what community investing might look like for a college endowment. Both gave accounts on how their partnership came to be and how the two institutions are working together to create resilient communities in New Hampshire.
Fireside Chat: The New Hampshire Charitable Foundation Story
Finally, we heard from Michael Wilson, the CFO and Vice President of Finance of New Hampshire Charitable Foundation, who leads the foundation’s impact investing program. Michael Hokenson (Co-Founder and Partner, Community Investment Management) guided the discussion to delve deeper into the specifics of how the foundation has created a portfolio of local impact investments from finding deal flow to creating a model to identify attractive investments.
Each panel was followed by an opportunity for participants to react and reflect on the topic at hand in small groups with peers, experts, and other stakeholders. The program culminated with participants breaking into groups to dive deeper into topics of their choice. The participants self-organized themselves around six groups focusing on areas such as integrating impact goals in municipal bond investments, creating frameworks for assessing financial and impact returns, educating institutional gatekeepers and decision makers on impact investing, bringing more diversity and inclusion in asset management, and identifying key actors in community investment for experienced asset owners.
Some of the opportunities and barriers of community impact investing that were identified by the participants throughout the afternoon include:
- Create collaborative financial infrastructure (like a fund of community investment funds) to make community investing more feasible for institutional investing
- Create a “hypocrisy report” which is a short document that highlights traditional investments that are having negative impacts on the intuition’s impact goals.
- Spread the word when companies engage in impact investing to create a new norm. Similarly, push the idea that impact investing is just investing
- Ask foundations to act as guarantors for placed-based impact investments
- Educate decision makers and have an evolving knowledge base
- Engage the next generation of investors to increase openness to impact investing
- Getting beyond the fear of illiquidity
- Institutional gatekeepers such as trustees or older board members
- Inflexible asset allocation models
- Due diligence required on small investments and having enough deal flow
- Lack of track record and standards for data
- Perceived lack of transparency and fear of making a political statement that may upset donors
- Skepticism on concessionary returns
This event proved to be a valuable opportunity for stakeholders to connect with and learn from one another and take back actionable steps to their institutions to enhance their leadership in place-based impact investing. At IEN, we hope to continue to advance the conversation on this topic through our peer-to-peer learning activities.
We are grateful for our sponsors who made this event possible, including Community Investment Management, Prime Buchholz and Cambridge Associates, and to The Boston Foundation for providing a wonderful venue for the event.
If you would like to learn more about community investing, please take a look at our selection of helpful resources related to sustainable cities and communities (SDG 11).