Your Guide to Impact Investing
Philanthropic advisors at Seattle Foundation discuss their current impact investing process and how philanthropists can get started.
July 22, 2016
By Allison Parker and Stephen Robinson
Philanthropists often ask us "does Seattle Foundation do impact investing? and if so, how do I get involved?" We have created an infographic to help explain how to get started and ignite your philanthropy through impact investing. But first, what is an impact investment?
An impact investment must be designed with the intention of both a financial return as well as a measurable societal or environmental impact. As a community foundation, our due diligence must weigh the prudency of the investment against taking appropriate risks for the benefit of our community.
Avenues of Impact Investing
To get started, either a philanthropist will bring an opportunity to Seattle Foundation and play an active role in the process or, our staff initiates an investment using our deep community knowledge, engagement, and catalytic funds. In our infographic, we have labeled these two starting points "Passionate Philanthropist" and "Catalyst Funds." Regardless of where it starts, we will apply our thoughtfully conceived criteria, which evolved through a year-long working group comprised of both staff and industry experts.
We ask ourselves:
How the investment improves economic and racial equity
Geography that would benefit from the investment
How the investment addresses one or more elements of Seattle Foundation's Healthy Community framework
Number of philanthropists interested and relationship with the donor(s)
If all these check out we will elevate the deal to our Board committee for approval and where it makes sense, Seattle Foundation will co-invest with philanthropists or vice versa. In order for the investment to make financial sense, we need to meet the basic minimums. For most impact investments, the minimum per philanthropists’ fund is $25,000. The overall investment must meet a minimum of $100,000 and a term of 3 years or longer.
To jump start our philanthropists' engagement with impact investing, Seattle Foundation is curating impact investment opportunities for participation by any of our funds. This means both Community Philanthropy Funds and Family Foundations have access to impact investing (Community Philanthropy Funds and Family Foundations are Seattle Foundation’s unique donor advised fund offerings).The opportunities will begin to go live on our website in late summer into early fall. A past example is Bellwether Housing, you can read more about it in Allison's previous blog.
We are excited to work in this space and be part of one of the first community foundations using donor advised fund dollars to fund curated investment opportunities. We feel good about the solid model for opportunities Seattle Foundation has created with support of our partners at Threshold Group and Canopy. The curated opportunities are really an on-ramp to impact investing to bring more philanthropists into the tent and thus deploy more dollars to benefit our community via nonprofit organizations and socially focused businesses.
For those of you who are already pioneers in this field and have been doing this work with your personal wealth and philanthropic dollars for years, we want to meet you where you are in order to further catalyze social change. For a community foundation this is largely uncharted territory, and Seattle Foundation is fortunate to have a Board committee and engaged philanthropists with expertise in impact investing to help us evolve into our next iteration. As a foundation, we are excited to continue this learning process and we invite you to participate.
Download our Infographic
Read a snapshot about case studies and learn more how to get started, download the full infographic now.
You can also learn more about our specialized services for philanthropists or download some resources and tools for philanthropists.
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