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Applying ‘integrated impact investment’ to align social and financial goals

Attending an in-person FCI or Impact event is nearly always an energizing and affirming experience, and in the post-COVID era these events feel even more welcome and appreciated. The recent Phenix Impact Summit America conference fits squarely in this category.

Entitled Reimagining the Purpose of Capital – Institutional Capital Serving People and Planet, this conference was held recently in NYC, with several faith organisations attending, including Episcopalians, Anglicans, Catholics, Methodists, and the United Church, in addition to many foundations and other investors.

One keynote address that stood out to me as particularly well-suited to an overarching theme of the conference – ‘doing well by doing good’ – was How Foundations Can Invest for Change, delivered by Sam Gill, President and CEO of the Doris Duke Foundation. This 15-minute talk presented an intriguing backdrop to the current urgency for action facing FBAOs and other values investors, stating that while the marginal propensity to consume has ‘historically been coincident with prosperity and human flourishing’, technological advancements have turned this relationship on its head, with our increasing marginal propensity to consume ‘no longer correlated with gains in human flourishing’.

With this historical backdrop creating ever greater urgency to optimize for impact, Gill suggests an approach Duke refers to integrated impact investment, defined as ‘the application of investing concepts as a strategic tool for maximizing the impact achievable by all of the foundation’s assets and activities’.

For example, ‘grants are great when the variable of time accounts for the gap between the perceived marginal social benefit of an activity and its marginal economic cost, while tools of communication, like thought leadership or convening a conference, work well when there is momentum in systems of public and private expenditure to address a social problem at scale but inadequate direction in which to channel that momentum’.

Aligning ‘social returns with financial returns’ can thus be sought by taking a ‘wide view of the social value of all assets held, tangible and intangible’, enabling foundations – and FBAOs – to match assets to the problems that best suit the attributes of those assets, and avoid the trap of trying to ‘fit the problem to a tool that you have'.


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