"Using business to serve the common good is the most powerful tool we have for improving the world."

Women’s Community Revitalization Project’s Loan Fund:  Harnessing new resources to create and preserve affordable homes in communities where housing costs are sky-rocketing. Rising housing costs coupled with stagnant household incomes are straining low-income families’ ability to stay in their homes. The Women’s Community Revitalization Project (WCRP) is a group working to address this issue in several Philadelphia neighborhoods by creating a Loan Fund to enable this effort to move forward.

“Water, water everywhere, and not a drop to drink.” This popular phrase often embodies the sentiment of diverse emerging impact fund managers who hear countless times, “We like your strategy and your team, but we don’t invest in first-time funds” or “Come back to us when you are on your fourth fund.” Amidst a vast sea of capital, these fund managers are often shut out of accessing the funds needed to achieve their impact goals. This is usually due to a lack of risk appetite for the perceived risk of investing with emerging managers.

The global coffee industry, often romanticized for its rich aroma and global connections, harbors deep-rooted challenges that disproportionately affect underserved communities in the African diaspora. This complex web of issues includes a stark lack of transparency, traceability, and equity, perpetuating cycles of poverty and dependence. Simultaneously, similar struggles unfold in the vibrant city of Philadelphia, where systemic inequalities create barriers for underserved communities. Amidst these challenges, efforts to bridge the gap between distant communities and Philadelphia are underway, focusing on resilience and empowerment.

The devastating consequences of divestment, like deteriorating infrastructure, vacant lots, and vast expanses of food and green space deserts, are glaringly obvious in low-income areas of Philadelphia. These inequalities in resources and opportunities have created a vicious cycle of poverty and made upward mobility very difficult. For the Philadelphia region, relying solely on traditional philanthropic models is insufficient to address these entrenched disparities and complex challenges. Poverty, inequality, and environmental degradation cannot be solved by simply chasing profit margins and depending on philanthropy.

The devastating consequences of divestment, like deteriorating infrastructure, vacant lots, and vast expanses of food and green space deserts, are glaringly obvious in low-income areas of Philadelphia. These inequalities in resources and opportunities have created a vicious cycle of poverty and made upward mobility very difficult. For the Philadelphia region, relying solely on traditional philanthropic models is insufficient to address these entrenched disparities and complex challenges. Poverty, inequality, and environmental degradation cannot be solved by simply chasing profit margins and depending on philanthropy.

Shareholder advocacy or activism is the process by which individual shareholders, or groups of shareholders, attempt to influence the decisions made by a company's management. It encompassed various strategies to engage in companies' investment portfolios on corporate, social, and environmental governance issues.

In September of 2022, the Department of Treasury provided $8.3 billion of Covid relief to CDFI and MDI banks through a program called Emergency Capital Investment Program (“ECIP”). This program provided substantial equity-like awards ranging from $60-500 million to encourage these organizations to increase their financial services to low- and moderate-income, urban, rural, and minority communities. Some recipients are publicly traded, and these large cash infusions attracted the attention of some deep value-seeking investors. In this article, I will explain why this program presents a rare potential opportunity to earn high financial returns while investing in entities that are making a significant impact in their communities. 

Imagine an inclusive, equitable, and vibrant community where individuals prosper, triumph over poverty, and live free from discrimination. Community First Fund, a Community Development Financial Institution (CDFI), works toward making that vision a reality by breaking down barriers to wealth-building opportunities for individuals, families, and business owners, especially Persons of Color, women, and immigrants.

The US Criminal Justice System directly impacts 6.6 million people costing more than $80 billion annually.  Racial disparities, extractive business practices, and misaligned incentives mar this profoundly broken system.  More than 4,000 corporations profit from mass incarceration through predatory pricing, prison labor, and the private prison industry, according to research conducted by the Prison Policy Initiative. But the opportunity exists to find highly innovative private sector business models that address the injustices of mass incarceration, poised for the ethical disruption of the Criminal Justice System.

The Outsourced business process service industry makes $300bn a year, employs 14 million, and has a 10-year CAGR of 8%. Yet it has a fatal flaw that may eventually destroy it: one of the highest employee turnover rates of any industry in the world. How can an industry be so successful while consistently losing most of its people all of the time?

How can I justify adopting an impact investing strategy if I have to choose among an alphabet soup of reporting standards, none of which clearly and consistently demonstrates results superior to not adopting them?

Combining blended capital approaches and systems thinking can help address the lack of capital for underserved entrepreneurs by taking a holistic and collaborative approach to investment and support.

For impact measurement to serve its highest purpose, the starting intention should be gathering data that serves to improve impact rather than to prove impact. In the end, the right metrics can do both, but the problem with orienting towards impact metrics that look good on a website, impact report, or update to funders is that it puts the emphasis on proving or supporting the impact thesis. The confirmation bias in that approach limits the ability to learn and improve as it causes triangulation that actually obscures clear impact of outputs to outcomes. The insight that is produced in listening helps develop learned methods instead of data on strengthening varying approaches for impact.

At Proof of Impact, we’ve worked with both investors and companies that have a wide range of motivations. In this work, we’ve noticed a growing trend: the widespread use of either “ESG” or “impact” to describe data-driven measurement and operational improvement efforts. However, rarely have organizations used ESG and impact together. This is largely because ESG and impact seem to be two different worlds that exist side by side, with different cultures, languages, and approaches to using data to drive positive change. Only recently have the two worlds met – or rather collided.

Simply put, smaller-scale development can be a lever for wealth creation, for affordable housing generation, and for community revitalization. And, crucially, it can do so at a cost that makes it accessible in ways larger scale development often isn’t.

In response to Boston’s notorious racial health and wealth divide, the Boston Ujima Project (“Ujima”) was founded in 2017 as a community-led business and finance ecosystem. We sought to underwrite our people’s strength by directly resourcing what we call our economy builders: our small businesses, artists, and grassroots organizations. People often ask why we chose an ecosystem model, and we always say: a systemic problem requires a systemic solution.

Profitability metrics are simple in financial terms, often measured by the rate of return, cash flow, or risk-adjusted return. On the other hand, solving problems is more difficult to define metrics and measures for. This creates a headwind for the impact investment industry as participants cannot establish consensus for the wide array of definitions for impact investment success.

As investment committees for nonprofit organizations review how funds (including endowment funds) should be invested, those committees need to consider the impact of those investments and ensure that they align with the missions of the nonprofit organizations.

The Kensington Corridor Trust fosters the equitable economic revitalization of a commercial corridor and its surrounding neighborhood through local partnerships, strategic programming, and an innovative approach to moving real estate assets out of the speculative private market. This pioneering model of neighborhood ownership, governance, and local economic development has the potential to keep control within the neighborhood and ensure long-term affordability.

To combat decades of disinvestment, we must refocus on a long-term systemic approach to increase equity in tech and venture capital. Often, people will quickly default to a pipeline problem, lack of social capital, or insufficient funding as sources of inequity in tech. In order to affect lasting change, we must address each of these issues simultaneously.

Minority businesses, especially those that are owned by African Americans or Indigenous people often lack the flexible capital that comes from family wealth. This money is crucial to the early stages of business growth and the lack of it can permanently stunt an entrepreneur’s ability to succeed. The problem that many entrepreneurs face is the absence of a market-driven replacement for personal wealth.

In every aspect of our lives, where we live, shop, work, learn, drive, and play has us fully connected by the built environment. As a result, the real estate industry has every opportunity to build community, unite cities and launch powerful ideas. Seawall's work in both Baltimore and Philadelphia fully demonstrates these outcomes.

What is the purpose of business? Many will suggest that the purpose is to create value. Traditionally that means creating a product or service that customers will pay for and selling it for more than it costs you to make. Impact entrepreneurs know there is more to value than that alone.

Charitable donations are vital to the social sector. Making money and giving it away so that nonprofits can accomplish critical work is an essential tool. However, many of us are learning that grants and donations are not the only tools for social change. We are finding that certain projects require different tools. And in many cases, we need both a hammer and a drill.

The clean energy transition is underway already. And we must use this transition not just to decarbonize our grid but also to address longstanding economic and racial inequalities tied to energy. We need to think about who ultimately benefits from the projects we invest in. Where are we building wealth and stability? If we don’t ask these questions when designing our clean energy future, then historically marginalized communities will continue to be just that – marginalized.

This article focuses on environmental considerations and identifies options for sustainable or ESG investors who may wish to invest in more energy-efficient alternatives while keeping in mind the highly speculative nature of cryptocurrency investing.

There has been exponential growth in ESG – Environmental, Social, and Governance – investing over the past few years, and global markets increasingly provide investors with opportunities to generate measurable, beneficial environmental impacts alongside a financial return. However, it can be difficult for place-based environmental investors to find opportunities with verifiable local impact. How would you invest in carbon sequestration if you wanted to maximize your investment’s benefit in the Philadelphia region?

Responsible investing has clearly come into its own this year, but some organizations still struggle to understand their obligation to promote responsibility in their investments. Many experts now believe that the failure to integrate ESG factors in investment decision-making represents a breach of duty. Faced with an intractable pandemic, an unprecedented recession, and heightened awareness of racial injustice, nonprofits have responded valiantly, deploying resources to help vulnerable communities meet their most basic needs.

This article will touch on some of the differences in investing in public vs. private markets. It will also endeavor to offer some practical questions to ask as you are researching private markets strategies, which are those that provide access to the asset class but have more liquidity than traditional private funds. We will discuss deal flow (and why it matters as much as it does), performance and outlook of public vs. private markets, and some of the challenges associated with traditional drawdown structure funds.

While both impact investing and ESG investing can deliver compelling financial returns, there are some key differences between the two. Understanding these can help impact investors make better investment decisions and avoid "impact washing."