Impact Investing Initiative
In 2008, the Board of Trustees of the Rockefeller Foundation approved $38 million in support of the Impact Investing Initiative for the period 2008–2011, which was subsequently extended through 2012, and extended again through 2013.
The Initiative sought to address the “lack of intermediation capacity and leadership to generate collective action” that was constraining the small but rapidly growing impact investing industry. Impact investing involves “investors seeking to generate both financial return and social and/or environmental value—while at a minimum returning capital, and, in many cases, offering market rate returns or better.”
Evaluating a Global Impact Investing Program
From 2011 through 2013, Jackson and Associates had the privilege of evaluating the Rockefeller Foundation’s global, $40-million Impact Investing Initiative. Engaging 100 leaders of this emerging industry working across 11 countries, and using a theory of change approach, the evaluation examined the program’s strengths, weaknesses and lessons. The report of the study was submitted to the Board of Trustees of the Foundation and resulted in additional funding for new activities in Africa, Asia and the Americas. The report, entitled “Unlocking Capital, Activating a Movement,” provides a case study of one approach to evaluating a grant-making program in the impact investing space.
Intended Outcomes of the Impact Investing Initiative
- Catalyze collective action platforms that enable impact investors to work together more effectively. This work has centered on the development of an international impact investing network that provides the vehicle through which a select group of global leading impact investors and intermediaries can launch initiatives, such as an independent standards setting body, and ultimately undertake advocacy and marketing. By 2010, these were also referred to as “leadership platforms.”
- Develop industry “infrastructure,” specifically collective platforms, networks, standards and rating systems, either collectively or as initiated by individual entrepreneurs, and in conjunction with the impact investing network, where appropriate. This work has focused primarily on supporting grantees to develop a sector-wide ratings system to assess the social and environmental performance of funds and enterprises, as well as a set of common terms and standards for investors.
- Support scaling of intermediaries such as nonprofit and for-profit organizations that undertake the work required to bring investors together, conduct due diligence, assess the viability of investors, package investments, and generally act as a bridge between the investors wanting to make a social and/or environmental impact and the market for doing so. Intermediaries help place capital in new geographies and subsectors, absorb impact investments at a scale necessary to attract the institutional investors who control the lion’s share of global capital, and invest this capital into businesses and projects that require both scaled resources and upfront subsidy in order to target poor and vulnerable people. Such intermediaries can take the form of private foundations (e.g., the Calvert Foundation), nonprofit loan funds (e.g., Root Capital), social venture capital funds (e.g., Acumen Fund) and equity funds investing in developing countries (e.g., IGNIA in Mexico). Intermediaries can also take the form of advisory groups for impact investors (e.g., Imprint Capital, ImpactAssets) and impact investees (e.g., Total Impact Advisors) that may or may not manage capital.
- Contribute to fundamental research and advocacy. In 2010, the Foundation added a fourth outcome to recognize the importance of research and the centrality of improved policy and regulations to take the impact investing industry to scale. This showed a clear path to engaging government to link advocacy with clear demonstration projects and credible research and analysis.
The Global Industry Scan
One of the products of the evaluation of the Rockefeller Foundation’s Impact Investing Initiative was a scan of the impact investing industry’s development, structure and current trends. Entitled “Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry,” this report has been widely cited, particularly its categorization of the various actors in the impact investing field.
Impact Investing Evaluation Briefs
Five other knowledge products were generated by the evaluation of the Rockefeller Foundation’s Impact Investing Initiative in the form of short briefs for professionals in evaluation, development, and philanthropy.
These briefs are
- “Assessing Impact Investing: Five Doorways for Evaluator”
- “Field-Building for Resilience: Ten Tactics for the Impact Investing Industry”
- “Measurement that Matters: Ten Steps for Assessing Social Impact”
- “Purpose-Built Networks: Ten Crucial Choices in Designing Effective, Resilient Impact Investing Networks”
- “Growing Supply and Demand Together: Ten Priorities for the Impact Investing Industry”
All these briefs can be viewed HERE