TRAILBLAZING WOMEN IN IMPACT INVESTING

The Case Foundation
By Sheila Herrling
August 11, 2016

Spe­cial thanks to Ramya Tal­lapra­gada, intern with the Case Foun­da­tion, for her con­tri­bu­tions to this blog.

In the years since the Case Foun­da­tion became a cham­pion for impact invest­ing, the move­ment has really taken off. In the U.S. and around the world, there has been a flurry of activ­ity among tra­di­tional investors, pol­i­cy­mak­ers, phil­an­thropists and researchers. We’ve seen tra­di­tional investors begin to real­ize the value of pri­vate cap­i­tal deployed for good, with­out the need to sac­ri­fice profit. We’ve seen con­certed efforts from the social sec­tor to build nec­es­sary infra­struc­ture for the impact invest­ing and social enter­prise com­mu­nity. We’ve seen gov­ern­ment cat­alyze progress by enact­ing pol­icy changes to increase the amount of cap­i­tal avail­able for good. We’ve seen impact invest­ments empower entre­pre­neurs with trans­for­ma­tive ideas to solve real world problems.

The impact invest­ing move­ment also stands out in another impor­tant way: women are emerg­ing as adri­ving force behind its growth—as investors, as entre­pre­neurs and as lead­ers of the move­ment. A recentNASDAQ piece notes that women are spear­head­ing and pop­u­lat­ing this sec­tor more so than any other finan­cial ser­vices sec­tor. I sup­pose there are a host of rea­sons why this is, but I par­tic­u­larly like a quote by Jackie Van­der­Brug of U.S. Trust in this arti­cle:

“I wouldn’t want to say it’s pink, but it has been a field where, philo­soph­i­cally, women have led. Part of that is because women have a more holis­tic view of invest­ment. Yes, they do care about returns, but they also care about the role of their invest­ments in soci­ety. It’s partly because they are look­ing for more oppor­tu­ni­ties to dif­fer­en­ti­ate them­selves. And it’s partly because they are look­ing to meet objec­tives beyond the benchmarks.”

A recent Calvert Invest­ments report asserts that women, along with younger investors, will drive the growth of impact invest­ing. In a study of afflu­ent women, Calvert found that 95 per­cent ranked “help­ing oth­ers” and 90 per­cent ranked “envi­ron­men­tal respon­si­bil­ity” as impor­tant. Women have also demon­strated that they often make pur­chas­ing deci­sions based on their per­sonal val­ues. Still, only 4 per­cent said that they under­stood how to make invest­ments that align with their val­ues. 70 per­cent did not know about sus­tain­able or respon­si­ble investing.

While busi­ness and invest­ing con­tin­ues to focus on boomers, this data shows the impor­tance of ensur­ing that women are aware of impact invest­ing strate­gies. Remem­ber, their pur­chas­ing power and, there­fore, their poten­tial social impact power is enormous—women con­trol 39 per­cent of investible assets in the U.S. That num­ber will con­tinue to rise, as 50 per­cent of pri­vate wealth in the U.S. will be in the hands of womenby 2020. And, amongst that group, it’s worth keep­ing an eye on Gen­er­a­tion X and Mil­len­ni­als set to inherit $41 tril­lion of wealth over the next 40 years, with a higher degree of mil­len­nial women who are edu­catedand look to have deci­sion mak­ing power (vs. their male counterparts).

Edu­ca­tion about oppor­tu­ni­ties and the how-to’s of impact invest­ing remain an essen­tial com­po­nent of lever­ag­ing the impact of women in impact invest­ing. Acti­vat­ing more invest­ment dol­lars into the space is what’s required to tip the move­ment from niche con­cept to main­stream invest­ment strat­egy. And typ­i­cally in the early stages of move­ment cat­alyz­ing, we require some “Be Fear­less” actors just “doing it” as we say in our Short Guide to Impact Invest­ing.

Here are some of the fear­less women lead­ing the charge. It’s by no means com­pre­hen­sive, but rather a spot­light on the mix of play­ers from phil­an­thropy, the invest­ment com­mu­nity, the finan­cial ser­vices indus­try and government:

In Phil­an­thropy:

  • I would be remiss not to start with our own Jean Case*. She is an avid cham­pion of the con­cept of putting pri­vate cap­i­tal to pub­lic good. Her work on the U.S. National Advi­sory Board for Impact Invest­ing helped craft a hugely suc­cess­ful coali­tion of change agents around a col­lec­tive pol­icy agenda. And she remains one of the most pow­er­ful influ­encers in the field, as an advo­cate, an ecosys­tem builder and an investor.
  • Clara Miller*, after assum­ing lead­er­ship of the Heron Foun­da­tion in 2010, has led the foundation’s effort to deploy all of its assets towards its mis­sion, break­ing down the tra­di­tional method of giv­ing within the orga­ni­za­tion and ensur­ing that impact invest­ing was totally inte­grated into the foundation’s oper­a­tions and mission.
  • Debra Schwartz* has led the MacArthur Foundation’s impact invest­ing arm for 15 years, direct­ing cap­i­tal to improv­ing afford­able rental hous­ing across the U.S.
  • Laura Arnold, co-​​Chair of the Laura and John Arnold Foun­da­tion, is a lead­ing advo­cate and sup­porter of Pay for Suc­cess, a poten­tial break-​​through financ­ing scheme for social ventures.
  • Kim­ber­lee Cor­nett*, Man­ag­ing Direc­tor of The Kresge Foundation’s Social Invest­ment Prac­tice, spear­heads the foundation’s effort to iden­tify and fill gaps in fund­ing for enter­prises in eco­nom­i­cally stressed com­mu­ni­ties using a strate­gic com­bi­na­tion of grant mak­ing and investing.
  • Paula Gold­man, Vice Pres­i­dent and Global Lead for Impact Invest­ing at Omid­yar Net­work, is a crit­i­cal thought-​​leader and move­ment builder in the space. And Omid­yar Network’s early move­ment in the impact invest­ing arena and con­tin­ued big bets in the space con­tinue to pave the way for future followers.

In the Invest­ment Community:

  • Nancy Pfund, Man­ag­ing Part­ner of DBL Part­ners, is a ven­ture cap­i­tal­ist that has proven that striv­ing for a dou­ble bot­tom line can be prof­itable for investors and com­pa­nies. Her cur­rent fund has com­mit­ted to mak­ing early invest­ments in com­pa­nies to not only facil­i­tate impact, but also encour­age the inte­gra­tion of impact into cor­po­rate cul­ture and operations.
  • Deb­o­rah Win­shel of Black­Rock Impact is trans­form­ing the way the tra­di­tional invest­ing com­mu­nity views impact. Black­Rock Impact over­sees $200 bil­lion in assets, offer­ing clients values-​​based, ESG-​​based and impact invest­ing strate­gies. A pas­sion­ate advo­cate for met­rics, Win­shel is also lever­ag­ing BlackRock’s quan­ti­ta­tive capa­bil­i­ties to mea­sure investees’ social impact.
  • Dina Habib Pow­ell, head of Gold­man Sachs’ Urban Invest­ment Group and Pres­i­dent of Gold­man Sachs Foun­da­tion, is another exam­ple of a leader mov­ing impact invest­ing to the main­stream. Man­ag­ing the firm’s hous­ing and community-​​development invest­ments, Pow­ell is direct­ing bil­lions of dol­lars to neigh­bor­hoods and under­served com­mu­ni­ties in need across the U.S.
  • Lisa Hall is Man­ag­ing Direc­tor of Anthos Asset Man­age­ment, a pri­vately owned invest­ment man­ager based in Ams­ter­dam. For­mer Pres­i­dent and CEO of Calvert Foun­da­tion, Hall is a cham­pion for invest­ing in enter­prises that aim to solve crit­i­cal social issues.
  • Maya Choren­gel* is the founder of Ele­var Equity, a fund man­ager com­mit­ted to using impact invest­ments to empower entre­pre­neurs around the world. Ele­var Equity’s early-​​stage invest­ments have enabled enter­prises to develop inno­v­a­tive busi­ness mod­els to solve crit­i­cal devel­op­ment prob­lems around the world.
  • Jenny Abram­son, founder of Rethink Impact, brings her diverse back­ground in con­sult­ing, edu­ca­tion, tech­nol­ogy and media to impact invest­ing. Rethink Impact is focused on invest­ing in com­pa­nies man­aged by women and lever­ag­ing tech­nol­ogy to cre­ate impact. Lis­ten to this pod­cast and her focus on enhanc­ing returns through gen­der lens investing.
  • Jen­nifer Pryce, Pres­i­dent and CEO of the Calvert Foun­da­tion, is at the fore­front of the effort to democ­ra­tize impact invest­ing. Through Vested​.org, the Calvert Foun­da­tion offers an inex­pen­sive way to become an impact investor by using the foundation’s Com­mu­nity Invest­ment Notes.
  • Erika Karp, Founder and CEO of Cor­ner­stone Cap­i­tal Group, lever­ages her exper­tise work­ing at UBS and as a found­ing board mem­ber of SASB to advance sus­tain­able investments.
  • Tracy Paland­jian*, Co-​​Founder and CEO of Social Finance, is lead­ing the charge to pro­mote public-​​private part­ner­ships through Pay for Suc­cess and Social Impact Bond models.
  • Audrey Choi*, CEO of Mor­gan Stanley’s Insti­tute of Sus­tain­able Invest­ing, brings her expe­ri­ence work­ing in jour­nal­ism, the social sec­tor and gov­ern­ment to build cross-​​sector part­ner­ships that pro­mote sus­tain­able invest­ing in build­ing resilient com­mu­ni­ties across the globe.
  • Dur­reen Shah­naz, Founder of Asia IIX and Shu­jog, is build­ing a robust impact invest­ing ecosys­tem in Asia. After estab­lish­ing Asia IIX, the world’s first social stock exchange, Shah­naz founded Shu­jog, which strives to amplify the impact of social enter­prises. Keep an eye on her lat­est idea—the Women’s Liveli­hood Bond.

To read the full blog, visit The Case Foun­da­tion.