Volume 72: Seeds of Change: Cultivating a Thriving Impact Investing Ecosystem in Philadelphia
About ImpactPHL Perspectives:
ImpactPHL Perspectives is a multi-part content series that explores the many facets of the impact economy in Greater Philadelphia from the perspectives of its doers, movers, shakers, and agents of change. Each volume is written directly by a leader in this space to discuss best practices and share lessons learned while challenging our assumptions about financial and impact returns. For more thought leadership like this, check out the full catalog of ImpactPHL Perspectives.
Dermot Murphy, Program Director, OptImpact
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.
In response to these types of challenges and opportunities across the region and the globe, impact investing has emerged as an increasingly popular approach to provide needed capital to address many of the systemic social and environmental challenges. This approach has gained momentum nationally and globally. The Global Impact Investor Network (GIIN) estimates that the size of the worldwide impact investing market is USD 1.164 trillion. This marks the first time the organization's widely cited estimate surpassed the USD 1 trillion mark.
The draw of impact investing goes beyond just providing immediate benefits. Impact investing promotes a sense of shared responsibility among stakeholders. When stakeholders engage with local place-based investments that prioritize community engagement and collaboration, investment decisions can align better with the needs and aspirations of those most affected. This participatory approach helps build trust and empower residents, transforming them from passive recipients to active change agents.
“Poverty, inequality, and environmental degradation cannot be solved by simply chasing profit margins and depending on philanthropy.”
These investment decisions have a far-reaching impact beyond the numbers on a balance sheet. Each dollar is intentionally directed towards a struggling neighborhood, an eco-friendly business, or a community-driven enterprise, creating a ripple effect that generates social and environmental impact, touching the lives of countless individuals.
This high-impact approach that has caught the attention of so many throughout the world is also creating systemic growth and change here in the Philadelphia region. Place-based impact investing is a powerful approach to addressing the complex vulnerabilities of the Philadelphia region. It acknowledges the need for targeted and community-specific solutions. Place-based impact investors collaborate with local organizations, residents, and institutions to inject capital into enterprises that drive sustainable development, economic empowerment, and social justice. By intentionally investing in the region's communities, place-based impact investments can help transform challenges into stepping stones towards a brighter future for the region, both financially and for the well-being of its people.
Philadelphia is home to pioneering investors and enterprises creating a regional impact investing infrastructure weaving a tapestry of change. These community-driven efforts are building an ecosystem that is transforming neighborhoods, businesses, and public spaces in Philadelphia, planting seeds of change that will bear fruit for generations to come.
Let's look at some pioneering organizations equipped to tackle the challenges different communities face and explore their success stories.
Kensington Corridor Trust:
The Kensington Corridor Trust (KCT) in Kensington, Philadelphia, is an innovative example of community transformation. Instead of imposing solutions from the top down, KCT empowers residents by giving them ownership and control of real estate. The organization acquires properties in a perpetual trust, ensuring long-term affordability and local decision-making. Their innovative model uses grants and mission-aligned investments to acquire properties, which are then leased at affordable rates to community-based entrepreneurs. This generates revenue that is reinvested in the neighborhood, creating a self-sustaining cycle of wealth creation and empowerment. KCT prioritizes community engagement, ensuring residents have a say in their future. This builds trust, fosters ownership, and sparks a sense of responsibility for the neighborhood's success.
Ben Franklin Technology Partners of Southeastern PA:
Ben Franklin Technology Partners of Southeastern PA (BFTP-SEP) fuels innovation across diverse industries, from healthcare to clean energy, by investing in early-stage technology companies and fostering a thriving ecosystem. They provide capital, expertise, and connections that empower entrepreneurs to navigate the challenging journey from concept to impact. Their success lies in their holistic approach. They partner with universities, research institutions, and other organizations to create a fertile ground for innovation and collaboration. They also champion diversity and inclusion, ensuring that all voices are heard and all communities have a chance to thrive.
The Enterprise Center's Innovate Capital Growth Fund:
The Enterprise Center's Innovate Capital takes an equity and opportunity-focused approach to empowering minority and women-owned businesses. Innovate Capital provides growth capital to these often-overlooked entrepreneurs, unlocking generational wealth. This licensed Small Business Investment Company (SBIC) invests not just in dollars but also in the belief of the untapped potential of these diverse founders. They provide resources and mentorship to help these entrepreneurs build sustainable ventures. The key to their success is their collaborative approach - connecting businesses with the right resources, from procurement opportunities to strategic partnerships, and empowering them to build thriving ventures.
Investors Circle Philadelphia:
Investors Circle is a network of passionate investors who support early-stage businesses that tackle critical social and environmental challenges. The organization's members, including angel investors, venture capitalists, and foundations, share a common vision of driving positive change through their investments. They seek ventures that generate competitive returns while addressing climate change, education, inequality, and healthcare access. Investors Circle goes beyond individual investments, creating impact. They foster collaboration and knowledge-sharing within their network, connecting entrepreneurs with valuable resources and expertise. This creates a fertile ground for innovation and amplifies the impact of their collective capital.
Philadelphia's impact investing ecosystem has thrived, with various organizations contributing to positive change through their unique focus and collaborative spirit. This has led to revitalized neighborhoods, empowered communities, and a more equitable and sustainable future for some.
“To successfully work with diverse perspectives, it's necessary to establish long-term partnerships and agree on a common goal. Innovation and scalability are crucial to expanding the capital available for place-based initiatives.”
The impact investing landscape in Philadelphia is growing, but some obstacles remain to overcome. To successfully work with diverse perspectives, it's necessary to establish long-term partnerships and agree on a common goal. Innovation and scalability are crucial to expanding the capital available for place-based initiatives. Additionally, it's essential to gather and analyze robust data to make informed investment decisions. Building trust and attracting more investors will require leveraging technology and establishing data-driven frameworks. These challenges are not unique to Philadelphia; most regions with growing impact economies face them. However, the Philadelphia region is intentionally working to address the hurdles that create an efficient and effective regional impact economy.
Achieving a sustainable, equitable, and resilient region requires a collective effort. ImpactPHL has a mission that promotes education, collaboration, innovative finance, and data-driven approaches that can unlock the full potential of impact investing to improve communities in the region. Impact investing is a financial strategy and a powerful tool for building a more just and sustainable future for the region. Our recently launched online platform, OptImpact, is a testament to the organization’s commitment to this effort.
“The Philadelphia region is intentionally working to address the hurdles that create an efficient and effective regional impact economy.”
OptImpact is a digital bridge connecting accredited investors with investable opportunities that create impact. It is a place where financial expertise meets social responsibility and where resources are allocated towards creating meaningful change. OptImpact acts as a catalyst, mobilizing resources and fostering connections between investors and enterprises that create impact.
This call to action extends beyond ImpactPHL and OptImpact. It beckons to all investors, impact enterprises working to create change at the ground level, government agencies shaping policy, and philanthropic institutions committed to impact investing. We invite you to become part of this vibrant ecosystem and leverage your unique resources, expertise, and passion to help build a brighter Philadelphia, brick by transformative brick.
Let's invest in the future of our region and work together to create a positive impact. Our goal should be to transform an economy that promotes progress while prioritizing social justice, environmental sustainability, and the well-being of all Philadelphians. We have the necessary tools and resources to act and create positive change. Let's work towards a brighter and more equitable Philadelphia for future generations.
If you are a social enterprise, impact fund, or accredited investor looking for opportunities to scale your positive impact in the region, join our online community and platform, OptImpact.
Accredited Investors: Here's what you can gain by joining OptImpact:
Diverse Opportunities: Discover and connect with a wide range of impact-driven enterprises across various sectors and themes, diversifying your portfolio and maximizing positive social and environmental outcomes.
Multiplied Impact: Joining our growing network unlocks access to diverse stakeholders, amplifying your individual impact while enabling collaboration among new co-investors.
Innovation: Be part of a vibrant community fostering knowledge sharing and collaborative problem-solving, leading to innovative solutions for social and environmental challenges.
Impact Enterprises: Here's what you can gain by joining OptImpact:
Targeted Exposure - OptImpact helps put your organization and your investment opportunity in front of a growing network of values-driven investors that are interested in high-impact projects.
Reaching beyond your immediate circle: Connect with diverse perspectives and uncover innovative solutions to the region's challenges. Break down silos and unleash the power of collective action.
Strategic Partnerships: Connect with partners who can offer more than just financial backing. OptImpact fosters collaboration with organizations providing expertise, resources, and marketing support, amplifying your project's impact beyond securing funding.
To learn more about how you can become a part of the OptImpact community, visit our website or contact us today. By joining, you'll become part of a collaborative community dedicated to unlocking the full potential of Philadelphia and its surrounding areas.
Don't wait to ignite the spark of change. Join OptImpact today, and together, let's build a brighter, more equitable future for all.
Take action now:
Dermot Murphy - Program Director of OptImpact, leading the development and execution of the OptImpact system, a cutting-edge initiative aimed at harnessing technology and innovation for sustainable social impact. Dermot has over 10 years of experience in impact investing and grant making while leading Halloran Philanthropies Mid-Atlantic grant and Impact Investments program. Where he committed catalytic capital in the form of patient, flexible and risk-tolerant investments. The focus of the majority of these investments supported community development, climate solutions, social entrepreneurship, financial inclusion, and social innovation.
Information presented on this site is provided as-is and is not a solicitation for investment and should not be relied upon to make investment decisions. This is not an exhaustive list, and the content is strictly for information purposes only - it is not and should not be regarded as investment advice or as an investment recommendation. Nor does it constitute any endorsement of, an offer to sell, the solicitation of an offer to purchase, or a recommendation to invest in any particular security or investment product. Investors are encouraged to consult their own advisors and perform their own due diligence to inform the appropriate course of action. Information contained herein pertaining to specific organizations and investment products has been derived from publicly available sources as well as materials provided directly to ImpactPHL by the organizations mentioned herein. Further, some of the entities listed in this document may provide financial and/or in-kind support to ImpactPHL's field-building activities. For the most up-to-date and accurate information, please contact the company directly.