• Summary

    Current U.S. laws prohibit those who want to invest directly into a start up company from doing so; but if they do change, social enterprises could benefit.

    "Asked to predict what the first wave of crowdfunded businesses will be, Jackley [founder of Kiva] says, 'I think social enterprises, I think retail. Anything that is a consumer brand that people love and can relate to and feel like they can be a apart of. When there's a social benefit attached to it, that's huge.'"

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    The East African reports on the group of 15 investors that supports the Global Impact Investing Rating System (GIIRS), and notes that GIIRS has already rated some East African companies.

    "According to Olivia Muiru, a rating associate at GIIRS, 30 East African companies were rated during the test. Out of these, 19 are in Kenya, five in Tanzania and six in Uganda. In the West African region, only three were rated: one in Nigeria and two in Ghana."

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    Impact investors are using insurance as a means of helping small businesses in India, rather than loans.

    "Leapfrog says that it is a big myth that because people have low incomes they are unable to pay for meaningful products. 'We are looking at the next billion consumers,' said Andrew Kuper, co-founder of Leapfrog. 'The consumers who are rising out of poverty and into the middle-classes... aspiring, seeking to acquire financial services and other services that allow them to go on their journey in a more effective way.'"

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    Forbes features an interview with Randall Kempner, Executive Director of the Aspen Network of Development Entrepreneurs. In this role, Randall oversees the implementation of ANDE's extensive program and policy agenda, including efforts to develop select standardized IRIS social and environmental metrics for impact investments in emerging market small and growing businesses, and training seminars on supporting and investing in emerging-market entrepreneurs.

    "The broader impact investment sector is beginning to mature. We've got a commonly accepted set of standards for measuring the social, environmental and financial results of impact investments (the Impact Reporting Investment Standards (IRIS) initiative); a continual stream of reports that aim to measure the present and future size of the industry, and a significant amount of activity focused on building marketplaces and exchanges to support investments in SGBs [small and growing businesses]."

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    GOOD magazine profiles Acumen Fund, Aspen Network of Development Entrepreneurs, Omidyar Network, RSF Social Finance, and more in this slideshow.

    "The Social Capital Markets Conference was an opportunity to find the best new social entrepreneurs to fund. GOOD talked with some of these pioneering investors to get tips for social entrepreneurs who want to attract values-driven cash."

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  • Summary

    Acumen Fund portfolio company WaterHealth International argues in Fast Company that creating an economic system to ensure clean water will have longer lasting results.

    "The for-profit model can be successful in helping underserved populations by effectively supplementing other activities. The public sector can do much more on their limited budgets by supporting business models that leverage private sector funding. This enables the public sector to reach a larger number of underserved communities compared to what would be possible if they went it alone."

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  • Summary

    The Economist discusses the momentum building around impact investing.

    "Investors have greater choice than ever. Five years ago anyone wanting explicitly to combine financial returns with virtue was limited to investing in social housing for poorer people in rich countries, microcredit and a handful of ethical mutual funds that shun sinful shares such as tobacco and defence companies. In June Impact Assets published a list of the top 50 impact investors, ranging from Blue Orchard, which has invested around $1 billion in microcredit, to IGNIA, which is investing its first $100m fund in growing small businesses in Latin America and is about to start raising a second fund."

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  • Summary

    The Financial Times interviews Caroline Mason, the chief operating officer of Big Society Capital, which hopes to attract more capital to social enterprises in the UK.

    "The Big Society bank cannot fill the hole left by public spending cuts, its chief operating officer has admitted, but aims to create a market for social investing that will draw in at least £3bn of private money. The bank, now renamed Big Society Capital as it will not take deposits and will only lend wholesale, will focus on facilitating investment rather than funding frontline services."

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    LeapFrog Investments, a social investment fund, made a $15 million investment in a unit of Shriram Group, a Chennai-based financial services company, that is targeting the lower-end mass market in India with insurance.

    "'It's very difficult for societies to develop without the ability to transfer risk,' says Jim Roth, co-founder of LeapFrog. Insurance, he believes, is key for that. But Mr. Roth is also clear that such a business needs to make a profit. 'If we don't make a profit, this is not going to be sustainable,' he said. 'We don't make a big margin on each client, but we look at a large number, a large base.'"

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  • Summary

    This issue of Innovations journal from MIT is dedicated to impact investing and features substantive conversations from industry leaders. The GIIN contributed this discussion about IRIS and the stakeholder involvement necessary to establish standards for a new industry.

    "Standardized accounting practices and financial reporting have evolved in tandem with the investment industry, and are now universally accepted and used. Today, the International Financial Reporting Standards (IFRS) guide reporting and aid interpretation of a business's financial position, and it is both de facto and, in much of the world, de jure that a business will regularly report standardized financial statements in order to function in a market.

    "How do such standards emerge? Can a common reporting framework be credibly developed and accepted over a few decades, rather than over millennia? After all, the IFRS have yet to be adopted in the United States, which instead uses the generally accepted accounting principles (US GAAP), a reporting standard that fulfills the same purpose. These are key questions for the impact investing industry, as efforts to develop and adopt a standardized set of social and environmental performance indicators begin to gain traction. For impact investing, uptake and widespread adoption of a credible, independent, common set of standards is critical for social and environmental impact to be realized and far-reaching, and thus for the industry to flourish."

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    Ron Cordes, co-founder of the Cordes Foundation, discusses his career in the investment industry, impact investing today, and his motivations for founding ImpactAssets.

    "The impact investing space is still in its infancy, but several studies from JP Morgan and others have projected that it will grow over the next 5-10 years into a sizable market - which is consistent with all of the conversations I'm having today with leading players in the field. Like any new investment category it will take time for investors and the advisors who serve them to embrace this new opportunity - but I'm quite confident that a strong groundswell of interests exists from individuals and family foundations who are becoming increasingly aware of how they can connect their 'passions with their portfolios'."

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