In our new series on investing for impact, Endeavor Group partner Ashley Allen looks at how foundations and individuals can leverage policy advocacy, public-private partnerships, data collection and analysis, social media, and the regulatory environment to maximize their philanthropic investments.

Combining Social and Financial Returns

by Ashley Allen

Social impact investing — a concept frequently raised but not clearly defined or understood — presents a compelling opportunity for foundations and philanthropists to maximize the leverage and impact of their work. Innovative philanthropists with higher risk tolerances such as Pierre Omidyar, Jeff Skoll, and Bob Pattillo, along with leading foundations and social impact funds like the Kellogg Foundation, Calvert Foundation,Acumen Fund, and Bill & Melinda Gates Foundation, are increasingly using social impact investing to expand their influence and introduce market-based solutions to the complex world of social change.

The increased interest of the philanthropic sector in social impact investing is driven in part by the desire of philanthropic funders and private investors to fuel sustainable interventions that address economic inequities and systemic, structural barriers to economic and social development. Leaders in the field believe that traditional charity often meets immediate needs but too often fails to enable people to solve their own problems over the long term. Accordingly, the social impact investment approach aims to catalyze the power of private markets to stimulate long-term social, economic, and environmental complex world of social change.

The increased interest of the philanthropic sector in social impact investing is driven in part by the desire of philanthropic funders and private investors to fuel sustainable interventions that address economic inequities and systemic, structural barriers to economic and social development. Leaders in the field believe that traditional charity often meets immediate needs but too often fails to enable people to solve their own problems over the long term. Accordingly, the social impact investment approach aims to catalyze the power of private markets to stimulate long-term social, economic, and environmental solutions.

Definition of Social Impact Investing

To date, no single definition of social impact investing has taken hold. TheGlobal Impact Investing Network, a group of organizations working to strengthen the field of social impact investing, defines it as investments that “aim to solve social or environmental challenges while generating financial profit.” This approach contrasts with “socially responsible investing,” which uses negative screens to avoid investments in companies whose behavior is deemed “bad” or “harmful.” We at Endeavor further delineate social impact investments as investments that actively seek to develop and prioritize market-based social and environmental solutions above financial returns. Accordingly, social impact investors have lower financial return expectations.

The field boasts a variety of investors, including high-net-worth individuals, foundations, community development finance institutions (CDFIs), private wealth managers, and commercial banks. It also encompasses several investment vehicles, with the core activities falling into four categories:

• microfinance loans and other financial services for the poor
• community development loans for small businesses or affordable housing
• loans or loan guarantees for the acquisition of real estate assets
• equity investments in clean technology, sustainable energy, health, education, and other social service sectors targeting low-income populations

Types of investments range from grants and endowment capital, to program-related investments (PRIs), to venture/equity capital and loan funds. In some cases, investors blend different types of capital with different requirements and motivations to achieve the desired social and financial returns. In the case of foundations, the lion’s share of social impact investing has been driven by grant capital, largely because strict investment policy stipulations limit (or are believed to limit) the range of investments appropriate for endowment capital. However, an opportunity exists for foundations to loosen these stipulations to allow for more creative and effective means of using all the resources at their disposal in support of their philanthropic goals.

A few illustrations serve to demonstrate this innovative approach:

Omidyar Network. Omidyar Network supports global poverty alleviation efforts through investments in the microfinance industry, a sector focused on providing small loans to the world’s poor. The organization addresses specific constraints to microfinance sector expansion by supporting efforts to improve lending practices, build out industry infrastructure, and expand loan volumes. Omidyar also strives to demonstrate the potentially self-sustaining and profitable nature of microfinance to traditional private-sector investors. Ultimately, ON believes that increased capacity and competition in the microfinance field will create economies of scale that drive down costs and improve financial services for the poor, breaking down a significant structural impediment to poverty.

Walton Family Foundation. The Walton Family Foundation has established itself as a leader in providing program-related investments to support charter school facility funds, fuelling the expansion of strong charter networks in more than thirty urban school districts, includingGreater Albany Public Schools, Detroit Public Schools, Chicago Public Schools, Milwaukee Public Schools, and District of Columbia Public Schools. From a structural perspective, the foundation pledges foundation assets as credit supports for tax-exempt bond issuances. The PRI comes in the form of a low-interest loan, which enables charters to access bond funding in a timely, efficient, and highly leveraged manner. A typical PRI loan guarantee allows charter operators to access five to seven times the amount of capital available without the PRI — and to do so at more attractive rates and with a less encumbered loan process.

Acumen Fund. Acumen is a nonprofit global venture fund that uses entrepreneurial approaches to address the problems of poverty globally. The fund was established in 2001 with seed capital from the Rockefeller Foundation, Cisco Systems Foundation, and individual philanthropists; it invests exclusively in businesses in the health, water, energy, and housing sectors directly serving the poor and that have economically sustainable business models. Capital commitments range from $300,000 to $2 million in equity or debt, with targeted payback in five to seven years. To date, Acumen has invested in more than thirty-five private enterprises providing services to over 36 million people across Africa, India, and Pakistan.

Conclusion

The emerging field of social impact investing continues to develop, with leading market participants aiming to define and quantify the approach while working to create efficient market mechanisms, ongoing deal flow, and commonly adopted analytical schemes that support an expanding capital market. The development of appropriate field infrastructure will require time and shared effort, as well as a greater openness to the social return construct on the part of those controlling major sources of investment capital. We believe, however, that as developments continue to unfold, philanthropists and private investors alike will be presented with compelling opportunities to expand their social impact investment activities.

(Ashley Allen is a partner in the Endeavor Group, an innovative consultancy offering an integrated suite of strategic, legal, and communications solutions to advance its clients’ complex global agendas.)

MacArthur Foundation Announces Open Call for Documentary Film Proposals
Grants ranging from $50,000 to $200,000 will be awarded to nonprofit organizations for the production and distribution of social-issue documentary films intended for a broad audience….

Posted on October 12, 2011
Deadline: December 2, 2011

Innovative Arts Ideas Invited for Second Annual Philadelphia Knight Arts Challenge
The three-year, $9 million initiative will fund the best and most innovative ideas submitted by local organizations and individuals seeking to transform the local community through the arts….

Posted on October 6, 2011
Deadline: October 31, 2011

Children and Youth

AVANCE Announces Call for Proposals to Implement Parent-Child Education Program
Four nonprofit organizations serving low-income Hispanic families will be selected to receive grants of $50,000 to adopt the AVANCE Parent-Child Education Program….

Posted on October 10, 2011
Deadline: December 15, 2011

Scholastic Art & Writing Awards Invites Entries From Creative Teens
Creative teens in grades 7-12 are invited to submit work in twenty-eight categories of art and writing and compete for nearly $4 million in awards and scholarships….

Posted on October 9, 2011
Deadline: Various; January 15, 2012

Open Society Foundations’ Youth Initiative Seeks Proposals to Curate Web Pages at Youthpolicy.org
NGOs are invited to submit proposals for up to $10,000 to develop and curate thematic pages on Youthpolicy.org, a new portal and community site that seeks to consolidate knowledge and information on youth policies around the world….

Posted on October 7, 2011
Deadline: Rolling

Environment

Save the Redwoods League Offers Funding for Research on Coast Redwood and Giant Sequoia Forest Ecosystems
Grants of up to $15,000 are available to nonprofit organizations working on basic and applied hypothesis-driven research on the biology and ecology of coast redwood and giant sequoia forest ecosystems….

Posted on October 11, 2011
Deadline: November 4, 2011

Fiskars’ Project Orange Thumb Invites Applications for Community Garden Grants and Makeovers
Ten nonprofits in the United States and Canada will be selected to receive $5,000 in cash and tools, as well as other support, to help beautify their neighborhoods and develop healthy, sustainable food sources….

Posted on October 8, 2011
Deadline: December 5, 2011

Chesapeake Bay Trust Invites Applications for Awards Program to Honor Individuals for Environmental Efforts
Educators and students who work to engage Marylanders in efforts to protect and restore the Chesapeake Bay and local waters will be honored with awards and scholarships of up to $5,000….

Posted on October 7, 2011
Deadline: December 16, 2011

Fisheries Innovation Fund Invites Pre-Proposals for Second Grant Round of 2011
Grants totaling up to approximately $2 million will be awarded to individuals, organizations, and non-federal government agencies working to foster sustainable fisheries….

Posted on October 6, 2011
Deadline: November 10, 2011 (Pre-Proposals)

Health

Robert Wood Johnson Foundation Offers Support for Healthcare Payment Experimentation
Ten grants between $100,000 and $500,000 will be awarded to nonprofits and government agencies working to reform local healthcare payment systems….

Posted on October 7, 2011
Deadline: October 27, 2011 (Brief Proposals)

New York State Health Foundation Launches 2012 Special Projects Fund Request for Proposals
One-time awards of up to $1 million will be given to organizations working to benefit the health of New York State residents through projects outside the foundation’s usual priority areas….

Posted on October 6, 2011
Deadline: October 28, 2011 and April 27, 2012 (Online Inquiry Form)

Philanthropy and Voluntarism

Council on Foundations Invites Entries for Wilmer Shields Rich Awards Program for Excellence in Communications
Awards will recognize excellence in communications by private and corporate grantmakers; the program has been streamlined from six categories to four (annual or biennial reports, electronic publications, special reports, and Web sites)….

Posted on October 6, 2011
Deadline: December 2, 2011

Social Science

Social Science Research Council Announces New Grant Program on the Study of Prayer
Approximately twenty to twenty-five grants of up to $200,000 will be awarded to scholars working independently or in groups to research practices of prayer….

Posted on October 7, 2011
Deadline: December 1, 2011 (Letters of Intent)

Q: I would very much like to go out on my own, and I’ve created a business plan for an exciting business. However, because I’m in the “pre-funding” stage, I’m still plugging away at my day job. Are there any minority loans or grants for small businesses that could help me make the transition to entrepreneur?

A: There’s a need for minority programs that assist in the maturation of new businesses, and there are several of these programs available. However, any entrepreneur seeking out these sources must also focus on how well her business survives independent of these programs–after all, a successful minority business will have to mature itself out of the program eventually. Make sure you have some sort of maturation plan in place that allows you to succeed without minority set-asides within three to five years, for instance; otherwise, you may find yourself simply building a business to be bought out or putting yourself at too great a risk.

Your first strategy is to look in your own area for local funding, which is available in some communities from redevelopment agencies and other local organizations. An example of a regional organization is FAME Renaissance, which operates several social and business development programs designed to create wealth in impoverished areas within Los Angeles County. Also in the Southern California area is Operation HOPE, a very worthwhile organization that has dispersed a total of $72 million in minority loans to homeowners and business owners. Even if you don’t live in Southern California, I’d recommend paying a visit to the Operation HOPE Web site, which has several inspiring success stories as well as transcripts of speeches from Operation HOPE founder John Bryant, who speaks eloquently about the issues revolving around the “digital divide” and economic empowerment. Some other regional organizations include Brotherhood Business Development & Capital Fund and Pacific Coast Regional.

On a broader scale, Ron Langston, Assistant Secretary of Commerce under the Bush administration, has been very dedicated to the growth of minority businesses and appreciates the special needs that a minority may face in making the transition to entrepreneur. Toward that end, have a look at the upcoming Minority Enterprise Development Conferenceand the Web site for the Minority Business Development Agency (MBDA). Besides information on funding, the MBDA site offers a wealth of good advice for any small business, minority or otherwise.

Besides loans to get started, there are also minority set-asides that an ongoing business can take advantage of. The National Minority Supply and Diversity Council (NMSDC)provides a direct link between corporations and minority businesses. A quick look through its list of member corporations–those companies that want to purchase quality goods and services from minorities on a competitive basis–reveals some of the biggest corporate citizens in the United States. The NMSDC, with regional offices in most states, is a good first step in seeking out your first contracts once you’ve launched your new business. You can even join its database of certified minority suppliers and get referrals to corporate buyers. In 2000, member corporations made purchases from minority businesses registered with the NMSDC exceeding $54.3 billion.

Janice Bryant Howroyd is founder, chairman and CEO of Torrance, California-based ACT-1 Group, the largest woman minority-owned employment agency in the United States, with more than 70 offices, 300 full-time employees, 65,000 temporary “stars” and annual revenues exceeding $500 million. Founded in 1978 around Howroyd’s personal philosophy of “Keeping the Humanity in Human Resources,” ACT-1 is today a multidivision conglomerate serving such clients as Ford Motor Co., Gap Inc. and Sempra Energy and meeting demands for well-educated and well-trained temporary, full-time and contract employees. She has twice been honored by the Star Group as one of 50 Leading Woman Entrepreneurs of the World.

I know its been awhile, but better late then never. Listed below is infomation that will take you to a podcast that you can listen to at work or anywhere. In this discussion, a filmmaker and a grantmaker help to demystify the various funding options available for grantseekers in film. Enjoy. Learn. Grow. Give Back. Until Next Time.

Please Click Link- http://foundationcenter.org/events/archive/20091008_ny_film.html

Film, Fundraising, and Social Change

New York, NY
October 8, 2009

This program is presented in its entirety, but you can select a segment by advancing your audio player to the corresponding start time.

03:11 Alice Elliott, film director, writer, producer and actress, founded Welcome Change, and she discusses the work of the organization. Alice directed the new documentary Body & Soul: Diana & Kathy for PBS.

08:46 Emily Verellen, Fledgling Fund, elaborates on why this grantmaker funds media, the application process, and the types of projects that are successful in getting their grants.

15:54 A general discussion about how filmmakers can best approach funders in order to foster creative partnerships.

40:00 Advice for getting support from four types of funders: individual donors, government funding, private foundations, and corporate donors. The speakers give details about the role that fiscal sponsors can play in facilitating the search
for funding.

1:05:08 Q & A

July 18, 2011, 11:32 am

By Rob Jenkins

Qeb-based retailer Gifts that Give launched a new website to enable consumers to donate to their favorite non-profit causes by shopping.

Combining online shopping with social good, Gifts that Give said it lets shoppers purchase upscale products at regular retail prices and give $1 out of every $5 they spend to any cause of their choice. All donations over $10 are tax-deductible.

According to a release, Gifts that Give was started by retail veteran Nancy Taylor, a former VP at Neiman Marcus, who brings retail experience and relationships with highly desired, upscale name brands such as Jay Strongwater, Anna Weatherley, Kim Seybert, Vietri, Agraria, Lafco NY, Toss Designs, Jonathan Adler, Lilly Pulitzer, Jellycat, Trumpette, to name a few.

“By making charitable giving part of something people do every day like shopping we can help causes bolster their fundraising and provide a new channel for fund-raising,” said Nancy Taylor, CEO of Gifts that Give. “People want to give back. We put it in the hands of the shopper shop for the products you love, choose the cause you love, and we’ll send the donation as a cut of our revenue.”

The Company noted that the website features a charity locator that lets the user search among the 1.1MM GuideStar-approved non-profits within seconds.

“Gifts that Give takes a unique and focused approach to cause-based commerce unlike any other business in the market today,” said Jon Provisor, Founder and CTO of Guidance, the developer for the website and an investor in the company. Donations are disbursed through Network for Good, a 501c3 that helps for profit business give to non-profit organizations.

More information:

www.giftsthatgive.com

4354 S Sherwood Forest Blvd Ste 200 | Baton Rouge, LA 70816 US

Arts and Culture
Tides Announces Thirty-Fifth Anniversary Social Justice Poster Design Contest
Professional and amateur artists from all backgrounds are invited to submit designs celebrating Tides’ social change work and compete for a cash award of $500 and other honors….

Posted on June 29, 2011
Deadline: August 15, 2011

Doris Duke Charitable Foundation’s Arts Program Invites Letters of Inquiry for Fund for National Projects
Grants of up to $200,000 will be awarded to nonprofit organizations and consortia working to implement national projects that promise to strengthen the professional dance, jazz, presenting, and theater fields….

Posted on June 27, 2011
Deadline: August 2, 2011 (Letters of Inquiry)

Endangered Language Fund Invites Proposals for Native Voices Endowment: A Lewis & Clark Bicentennial Legacy Project
Matching grants of up to $30,000 will be awarded to individuals, schools, and language programs working to revitalize and perpetuate the aboriginal languages of Native tribes encountered on the Lewis & Clark Expedition….

Posted on June 26, 2011
Deadline: October 17, 2011

Children and Youth
Ashoka and Staples Launch Fifth Annual Global Competition for Youth Social Entrepreneurs
Youth working to address social issues in their communities through innovation and technology can win a trip to the Techonomy 2011 conference as well as a cash prize….

Posted on June 25, 2011
Deadline: September 19, 2011

Education
Sodexo Foundation and Youth Service America Invite K-12 School Applications for Children’s Hunger Service-Learning Grants
Grants of $5,000 will be awarded to U.S. K-12 teachers and adults working with K-12 students on service-learning projects focused on childhood hunger….

Posted on June 30, 2011
Deadline: August 15, 2011

Institute of Museum and Library Services and MacArthur Foundation Announce Learning Labs in Libraries and Museums Project
Grants of up to $100,000 will be awarded to U.S. libraries and museums working to design new media learning labs serving middle- and high-school students; Webinars for prospective applicants will be held June 28 and July 12, 2011….

Posted on June 28, 2011
Deadline: August 15, 2011

Environment
American Forests Offers Cost-Share Funding for Tree-Planting Projects Around the World
Grants will be awarded to private- and public-sector organizations and agencies around the world working to plant trees and restore ecosystems in projects that would otherwise not be feasible due to lack of funding….

Posted on June 30, 2011
Deadline: July 1, 2011 and January 15, annually

Funding Available to Help Restore Seabird Populations on the Baja California Pacific Islands of Mexico
A total of approximately $4 million will be awarded to U.S.-based non-governmental organizations and individuals working on single or multi-year seabird restoration projects….

Posted on June 29, 2011
Deadline: August 8, 2011

Fund for Wild Nature Accepting Applications for North American Conservation Campaigns
Grants of up to $5,000 will be awarded to small organizations working to save and restore native species and wild ecosystems, with particular emphasis on defending threatened wilderness and biological diversity….

Posted on June 24, 2011
Deadline: September 1, 2011

Patagonia Offers Funding for Grassroots Environmental Campaigns
Grants of up to $8,000 will be awarded to nonprofits conducting environmental work that is action-oriented, strategic, and demonstrates a commitment to long-term change….

Posted on June 24, 2011
Deadline: August 31, 2011

National Forest Foundation’s Matching Awards Program to Support Community Stewardship Projects
Matching grants of up to $100,000 will be awarded to nonprofits, tribes, and universities conducting on-the-ground conservation and monitoring projects on or around national forests and grasslands….

Posted on June 24, 2011
Deadline: July 18, 2011

Health
DentaQuest Foundation Seeks Proposals for Venture Fund for Oral Health
A total of up to $1 million will be awarded to up to four nonprofits and public entities working to expand oral health programs that have demonstrated positive outcomes….

Posted on June 30, 2011
Deadline: Rolling, through December 2011

American Dental Association Foundation Accepting Applications for Harris Fund for Children’s Dental Health Grant Program
Grants of up to $5,000 will be awarded to nonprofits and government agencies working to provide education programs that can help parents and caregivers prevent early childhood caries, also known as baby bottle tooth decay….

Posted on June 29, 2011
Deadline: July 18, 2011

Philanthropy and Voluntarism
Root Cause Seeks Boston Area Nonprofits for Social Innovation Forum
Six innovative nonprofit organizations working to address social issues in the Boston area will receive approximately $120,000 in grants and professional services….

Posted on June 28, 2011
Deadline: August 3, 2011

Science/Technology
Burroughs Wellcome Fund Invites Proposals for Career Awards at the Scientific Interface
Five-year awards of $500,000 will be made to early-career academic researchers in the physical/computational sciences whose work addresses biological questions….

Posted on June 30, 2011
Deadline: September 1, 2011 (Pre-proposals)

Corporations are increasingly moving away from social-responsibility programs that just give away money and more toward using philanthropy as a business strategy that produces both financial and societal returns. As a result, nonprofit organizations must find new ways to work with companies other than asking for donations, writes Jason Saul, chief executive of Mission Measurement, a consulting firm that helps companies measure and improve social impact.

The goal of corporations is not to do good, but to develop strategies that make possible unlikely business expansion by overcoming social barriers to entry.a Mr. Saul advises charities to embrace similar thinking; they a need to figure out how to sell their impact as a business proposition a as more businesses expect greater accountability for the money they give.

As an example of a new approach companies are taking, Mr. Saul cites the success of Unilever in recruiting and training poor Indian women to become local sales representatives of products specially made for low-income people. As a result, the company nets $100-million annually from the venture and is providing jobs to 45,000 people.

Unilever also co-founded Global Handwashing Day, along with UNICEF, the World Bank, and Procter & Gamble, which resulted in a decrease in the deaths of needy children from germs transmitted through diarrhea and pneumonia. The effort, which promoted use of the company as Lifebuoy soap, made the product one of Unilever as fastest-growing personal-care brands.

Mr. Saul writes that Unilever and many other companies now give less attention to cash grants and place more emphasis on an on cash resources that they have in far greater abundance their supply chains, distribution networks, and marketing prowess, and their business footprints to create business strategies that deliver significant social value.

Philanthropy, he writes, is moving beyond giving away money, and charities that do not keep up risk being left behind.