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![Page 1: Impact Investing 101cfavirginia.commercelane.com/images/20170110_Presentation.pdfChief Impact Officer, VCC President, LOCUS January 10, 2017 Impact Investing 101. Imagine your PLACE](https://reader034.vdocuments.us/reader034/viewer/2022042804/5f537d7eb93fe8613a385b21/html5/thumbnails/1.jpg)
Teri Lovelace, Esq.Chief Impact Officer, VCCPresident, LOCUSJanuary 10, 2017
Impact Investing 101
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Imagine your PLACE
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Access to healthy food for everyone …
Healthcare to those who have gone without…
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Affordable homes for all people …
Vibrant downtowns & thriving businesses …
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“investments made into
companies, organizations,
and funds with the intention
to generate social and
environmental impact
alongside a financial return.”
Impact Investments are …..
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“We once looked to charitable giving and philanthropyas the primary, perhaps even exclusive, source of private money for public good.
The last half decade has seen significant growth in impact investing, a phenomenon – some would call it a movement -— that is fundamentally changing capital markets for nonprofits and social enterprises.”
The Changing Landscape
Lucy Bernholz & Rob Reich Stanford Social Innovation Review (May 2012)
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Agenda
• Definitions & Evolution of Impact Investing
• Size
• Local Examples
• Unlocking Capital for Community Investing
• Measuring Impact
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Names
• Socially responsible investing
• ESG
• SRI
• Blended
• Impact Investing
• Community Investing
• Mission aligned investing
• Direct Investing
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Social Investing
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Generational Trend
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Evolution of Impact Investing
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Impact Investing Continuum
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Source: The investment graphic above is a rendering of The F. B. Heron Foundation’s Mission-Related Investment Continuum
Concessionary vs Market Rate
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SRI Investing 2016
GREENMONEY E-Journal January 2017 – The Report on US Sustainable, Responsible and Impact Investing Trends
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GREENMONEY E-Journal January 2017 – The Report on US Sustainable, Responsible and Impact Investing Trends
Sustainable Investing Growth in US
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GREENMONEY E-Journal January 2017 – The Report on US Sustainable, Responsible and Impact Investing Trends
Money Managers 2016
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Business as Force for Good
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Impact Money Markets & Deposits
• Socially Motivated Depositors
• Solar CDs
• Money Market Accounts
• Savings and Checking Accounts
• FDIC
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Fixed Income
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Equity
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Unlocking Community Capital
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Place-focused Philanthropic Assets
Philanthropic assets that care about “Place”
$125 billion
$66b Community Foundation assets
$26b Health Care Conversion Foundations assets
$33b national DAFs
Sources: Foundation Center, Key Facts on Community Foundations (2012); National Philanthropic Trust, 2015 report on Donor Advised Funds; Chronicle of Philanthropy June, 2016 & June 2014
CF
HCCF
DAFs
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$125 billion
Place-focused Philanthropic Assets
1% = $1.25b
1% of philanthropic assets that care about Place = $1.25b
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Who’s Doing Community Investing?
• Community Development Banks• CDFIs• Community Credit Unions• Private Foundations• Community Foundations• Family Offices
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Barriers
Finding mission investments
Fiduciary concerns
Lack of financial due diligence skills
Risk mitigation & oversight
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LOCUS will . . .
Empower foundations with the infrastructure, skills & support to make smart, direct mission aligned investments based on their risk appetite in furtherance of their charitable purposes.
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Why LOCUS?
VCC = nonprofit, regulated bank holding company & CDFI
direct investing for good
VCC’s 10 year
experience
Foundations deploying its assets
Mission aligned
investing
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$850 m in total impact $367 m lending (572 loans) Leverage ratio $1:$1:31 Low charge off ratio: 0.10% $102 m FDIC insured social deposits $207 m AUM
Ten Years of Experience
Financial Impact
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Ten Years of Experience
Social Impact
5,831 jobs created/retained 4,844 affordable housing 9,135 MWh of clean energy
produced 24 health care/ food access
financing
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Partnering with Foundations, HNW & family offices
EducationPolicies &
ProceduresTransactionExecution
Servicing, Monitoring &
Reporting
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CDFI & Banking Experience
Execute Transactions
Service, Monitor & Report
Source deals Financial due diligence Impact Measurements Close transactions Secure collateral
Monitor & annual reviews Service transactions/funds Expenditure Responsibility/Self-dealing review Impact & Financial reporting
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Measuring Impact
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Local Efforts
http://www.vaimpactinvestingforum.com/
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“The world has changed, and so must we.”
Clara Miller, President
F.B. Heron Foundation
Time to Innovate