Category Archives: Social Impact Investment

General blog posts relevant to social impact investment. These musings will range, probably randomly, from human capital and organizational growth to financial structuring and investment strategy. If we’re talking about it – or wrestling with it – in an OPI team meeting, chances are you’ll be reading about it here. Our particular area of expertise is emerging markets private investment, focused on priority social sectors and multiple bottom line returns, and this will undoubtedly influence what we choose to talk about in this blog, for better or worse. We’ll break out more categories as we accumulate postings — and please do send an email if there are impact investment issues you’d like to hear about:

TMITM – The Reboot!

For six years, One Planet Ventures created weekly blog posts highlighting impact investment issues potentially deterring the flow of money between investors and those desiring to create social &/or environmental impact. The problem that prompted the launch of “The Money in the Middle” or “TMITM” was the “chicken or egg” syndrome. Very little product available in the market and lots of demand. Do you create an impact venture and then look for funding sources? Or do you mobilize funding sources while searching for placement options?

The answer, from a perspective of “rational self interest”, is that you target funding first. It pays a lot better to raise the money and then find suitable impact investment product than it does to launch a social enterprise or design a climate adaptation and resilience facility and then seek  investors. Why? Many reasons, but a biggie is the timing gap – if you raise and manage funds, generally you are paid paid based on assets under management, so the more money you raise, the bigger the paycheck you can take home. Designing a set of impact activities that can be aggregated and funded at a reasonable scale takes a long time. First the design work, then internal buy-in from management, then Board approval, then the fundraising process which, on its own can require 18-24 months of consistent effort.

On balance, the world needs more people creating “investible” / “bankable” multiple bottom-line impact projects, but to really get lots of these #innovative and intentional products to market, it helps to mobilize large amounts of appropriate funding. I decided that trying new ways to achieve positive outcomes (new donors, investors and products in the impact and sustainable finance space) was more important than trying to “get it right” first time out of the gate. Rather than risking becoming the voice of “Bah, humbug!”, I shut down TMITM in 2015 and focused my efforts on climate adaptation and resilience.

And then SURPRISE! I’m hearing the same arguments against funding new #ClimateAdaptation and #Resilience instruments that I heard about impact investment funds in 2010. Yes, the public sector must tap private capital to overcome the social and environmental challenges that threaten the survival of humanity. Yes, the private sector will need to think differently about multiple-bottom-line investments than they do about purely financial investments. However, both sides are wrong when they talk about what they believe the other side “must do”.

The challenge for #climate is the same as the challenge for #social #impact – between intended good deeds and willing investors there is a #transformation function that must occur: identifying risks, smoothing the self-manageable (internal) #risks and using #creditenhancements to mitigate some of the external risk factors. That’s what I do, through One Planet Ventures LLC (US) since 2009 and as of today, 1 October 2018, through OPV International (NL)! I work with strategic clients and/or investors to create #strategies, operating, funding & #governance structures that offer the largest win-win to the greatest number of stakeholders. Longer term funding and better, risk-balanced structures are my priority. Going forward, TMITM will focus on financing and #impactinvestment models and practices that are advancing the causes of “social and green” regardless of sector and what geography. If success is contagious, I hope this blog contributes to an epidemic of successful #SustainableFinance.

Lauren Burnhill ~  @LaurenOPV