Strategic Change through Impact Investments

Looking to make a difference and some cash?

Impact investing is a funding model that implements lasting change and the possibility of a financial return. An innovative, fluid way of contributing to nonprofits, impact investing integrates social and environmental issues into financial markets instead of leaving these issues to philanthropy alone. Through this mashup, both donors and recipients can reap financial benefits.
Impact investments take many forms, as each investor/investee relationship is different. In the Lowcountry, three organizations are unique impact investment strategies that show the breadth of opportunities in this field.
Nurse Family Partnership (NFP), a national organization with a branch in the Lowcountry, focuses on fostering a relationship between nurses and first-time, at-risk mothers to ensure that all health needs are met for them and their newborns. In recent years, NFP has started to utilize impact investments through Social Impact Bonds (SIBs). These bonds create a contractual, three-way partnership between the government, the provider (in this case, NFP) and the recipient. Through this partnership, the investor advances capital to the provider, and if all outcome metrics— previously established in the contract—are met, the government returns the capital to the investor. Through this relationship, a mutually beneficial, healthy partnership is formed, in which the provider receives steady income, the government knows it will invest in an effective program and significant outcomes are provided to the recipient.
SC Community Loan Fund (SCCLF) commissions loans to members of the community who are in need of housing and essential services and to businesses that help stimulate economic activity. This type of low-interest loan is yet another example of impact investing that can generate social good and financial return. SCCLF receives funding through charitable donations and investments. Investors agree to contribute a minimum of $25,000 with a minimum term of five years. These loans are repaid at a low interest rate for recipients, and investors receive a two percent return, pairing socially and fiscally responsible distribution of funds with financial returns and state/federal tax breaks.
The France P. Bunnelle Foundation, an affiliate of CCF, has utilized impact investments through programmatic support of the Dolly Parton Imagination Library (DPIL). The DPIL focuses on building a home library by giving a child one book every month from ages 0-5, enhancing literacy at an early age. The Bunnelle Foundation has invested in this program by establishing a fund that provides this service to all children in Georgetown County. This program has been in the works since 2008 and through this method of impact investment, a financial return is not necessarily generated, but an entire population is positively affected by a strategic, long-range community investment.
To learn more about how impact investing fits into Coastal Community Foundation’s long-term investing strategy, contact Vice-President of Finance/Chief Investment Officer Brian Hussain at brian@coastalcommunityfoundation.org.

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