Exploring Social Impact Investing for Fundraisers: A Modern Approach

1. Social Impact Investing: A New Tool for Fundraisers? R. F. “Rick” Shangraw, Jr. Arizona State University Enterprise Partners

2. Topics • What is Social Impact Investing? • Why Should Fundraisers Care about Social Impact Investing? • What are Some Real Examples of Social Impact Investing in lieu of Traditional Fundraising?

3. Investment Spectrum Source: OECD, 2019

4. Lots of Activity

5. Some Definitions • Social Impact Investment– An investment by individual or institutional investors made with the intention of generating both positive, measurable social impact AND a financial return. • Program-Related Investment(PRI) – An investment furthering an organization's exempt purpose most often made from assets designated for charitable qualifying distributions. • Mission-Related Investment(MRI) – An investment furthering a private foundation’s mission made from assets that are NOT designated for charitable qualifying distributions.

6. Some Definitions • Recoverable Grant– An investment from a private investor with the expectation that the grant will be paid back (sometimes with interest). • Social Impact Bond(Pay for Success) – A bond where repayment to investors is contingent upon specific social outcomes being achieved.

7. Common Features Create positive social impact.* • Create some level of financial return • An investable program: • Must generate revenue • Is auditable and separable from other programs • Must create measurable social impact * “Social impact” is broadly defined and can include environmental, educational, or community outcomes.

8. Who Invests? • Individuals • Private Foundations and Family Offices • Development Finance Institutions • Investment Banks • Pension Funds • Non-Governmental Organizations

9. The Ecosystem Source: SoPact, 2019

10. Why Care? • Move from traditional philanthropy fundraising to broader resource raising. • Move from affinity-based initiatives to cause-based initiatives. • Identify a new set of philanthropy prospects through social impact networks. • Demonstrate market support for programs.

11. Some Examples

12. Our Story: Project Attainment

13. The Challenge • Expand higher educational opportunities to employees – reinvent the tuition assistance benefit offered by many employees. • Build on the very successful Starbucks partnership. • Secure resources to expand the Starbucks program to other large employers: • Business development • University partners • Employee engagement platform

14. The Concept

15. Lessons Learned • Complete buy in from key stakeholders – it is a challenging journey. • Willingness to evaluate and report financials in a for-profit structure (and acceptance that the investors will make money on the transaction). • Use of a Letter of Intent to align expectations before resources are spent on a transaction. • Assuring the social mission is valued (use of a B-Corp structure, measurable social goals for investors, alignment on social mission). • Ability to execute.

16. Questions & Comments Thank You !