Sponsored by GIIRS

This story originally appeared in our March 24, 2011 e-magazine. Click here to subscribe.

The official launch of GIIRS won’t come until July 2011, but Beyond Profit got an inside look at the beta tour.

A November 2010 report from J.P. Morgan and the Rockefeller Foundation declared impact investments an emerging asset class. With new potential comes new challenges.

Impact investing puts a spin on the traditional idea of investing where decisions are made based on financial as well as social and environmental considerations. As a result, measuring returns goes beyond the traditional financial metrics to include tracking social and environmental performance.

Measuring impact can be a tricky proposition though. The issue is that no unified system to measure impact exists, which leads investors and others to rely on anecdotal evidence. The Monitor Institute report “Investing for Social and Environmental Impact” recommended a rating system to standardize metrics. » Continue reading “The Rate of Impact”

Sponsored by GIIRS

This story originally appeared in our March 24, 2011 e-magazine. Click here to subscribe.

Impact investing faces challenges in its effort to scale. GIIRS can provide solutions.

1.     Fragmentation

The impact investing sector is in a nascent stage so there is very little sector mapping or even a clear definition of what exactly impact investing is. Different companies and investors use and require different metrics. GIIRS will help unite the sector by creating a standard of metrics. The GIIRS assessment has the potential to create a collection of rated impact investments. » Continue reading “Challenges to Scale”

Sponsored by GIIRS

This story originally appeared in our March 24, 2011 e-magazine. Click here to subscribe.

Grassroots Business Fund participated in the GIIRS beta tour. Beyond Profit spoke to Soha Ehsani about the GBF’s work, impact investing and the future.

How did Grassroots Business Fund (GBF) start?

The Grassroots Business Initiative (GBI) was incubated inside the International Finance Corporation for two years before spinning off into GBF. GBI made similar investments, but given the structure and size of investments, it was decided that GBF would be more suited as its own entity.

What makes GBF different from other funds out there?

With growth, we are seeing the need to develop an ecosystem characterized by the sharing of best practices, strengthening of players and assignment of pools of capital to support organizations in impact investing. There are pieces of infrastructure that are coming together such as definitions, metrics and some groupings. However, impact investing remains far less advanced than microfinance, which early on developed a robust set of players, practices and principles. GBF identifies itself as a fund that works with businesses that are looking for more than just capital. We add value to our investees through direct technical assistance and local expertise.  In essence, we complement our investment capital with a very hands-on approach to prepare our clients for the next stage of their business. » Continue reading “At the Grass Roots Level”

It’s easy to get wrapped up in an attractive story: the Harvard grad who gave up a comfortable life on Wall Street to move to Africa and start a microfinance institution or the pretty 17-year-old model who abandoned a promising career to rescue orphans in Cambodia.

Daniela Papi, of PEPY and PEPY Tours, points out that not only is this “hero worship” superficial, it’s also harmful. On her blog, she relays a story she heard from a friend: » Continue reading “Stop the Worship and Measure the Impact”

This story originally appeared in our December 3, 2010 e-magazine. Click here to subscribe.

Morgan Simon, Founder of Toniic, a new company that will aggregate angel investments in the social enterprise sector, spoke to Nisha Kumar Kulkarni about the need for such an organization and current challenges that investors face.

Toniic, a new aggregator of angel investments will facilitate global investments in the social enterprise space. The organization will work to increase the amount of early-stage funding for entrepreneurs working in the developing world. Through innovation partnerships, Toniic hopes to make investing easier.

BP: How would you define impact investing? What does that term mean to you?
MS: Impact investment is an important tool for those who seek a more equitable and sustainable society. Unlike philanthropy, which seeks to maximize social impact without a need for financial return, and conventional investment, that seeks to maximize returns without any regard for social impact, impact investment provides an opportunity for individuals and institutions to have their cake and eat it too; achieving the financial returns they require while also seeking to maximize social impact. This might mean providing financing for a school or health clinic that will ultimately, unlike a charitable institution, be a self-sustaining entity. Hence, for many entrepreneurs, impact investment rather than donations can also lead to greater long-term sustainability, as they specifically use funds to ensure that projects will continue in perpetuity without the need for annual donor support. It can also ensure that they can be most responsive to the needs of their communities, as their clients are their patrons rather than external donors. » Continue reading “Interview: Morgan Simon, Founder of Toniic”