Cogent Consulting in the Press

This week Cogent Consulting has been featured in several articles for the fixed income bond fund that Susan Hammel and Eric White created for Minnesota Council on Foundations. Check out these articles from Chief Investment Officer, Mission Investors Exchange, and Philanthropy News Digest to learn more about the bond fund.

Minnesota Foundations Collectively Drive Impact at Home

By Chief Investment Officer

Minnesota foundations are joining forces and putting investment dollars to work to help their neighbors. The Minnesota Council on Foundations (MCF), which includes members such as the McKnight Foundation, Bush Foundation and Otto Bremer Trust, has announced a collaborative effort toward impact investing targeting affordable housing and small business lending throughout Minnesota.

Minnesota Philanthropy Leads With $17.1 Million Investment For Social Good And Financial Returns

By Mission Investors Exchange

The Minnesota Council on Foundations (MCF) announced a first-of-its-kind impact investing collaborative in the US. MIE members The McKnight, Bush Foundations and the Otto Bremer Trust are among the lead anchor investors.

MCF Launches Minnesota Impact Investing Collaborative

By Philanthropy News Digest

The Minnesota Council on Foundations, in partnership with three Minnesota foundations, has announced the launch of a statewide impact investing collaborative.

Inspired by a similar initiative established by the Michigan Council on Foundations, the three MCF member foundations — the McKnight and Bush foundations and the Otto Bremer Trust — have agreed to commit more than $17.1 million to an impact investing fund. The pooled funds will be invested in RBC Global Asset Management’s Access Capital Community Investment Fund, a fixed income bond fund focused on affordable housing and small business lending in Minnesota.

Minnesota Foundations Tie $17 Million to Impact

By The NonProfit Times

A group of Minnesota foundations are the latest to announce a commitment to impact investing with their charitable assets.

Led by the Minnesota Council on Foundation (MCF), a consortium of at least a dozen foundations has committed more than $17 million to a fixed income bond fund focused on affordable housing and small lending in the Great Lake State.

Thanks to support from the Bush Foundation, Cogent Consulting has spent the last year partnering with Impact Hub MSP to scale and mainstream the Twin Cities Impact Investing Ecosystem. During the course of the year, engagement in the project scaled from 50 to over 400. Here are the 5 biggest of the project:

Broadcasted the state of the ecosystem internally and externally

In the first phase of this project we created an interactive map of the impact investing ecosystem. We built the map by seeking self reported ecosystem participant data through surveys and interviews of ecosystem members. By adhering to a strict definition of impact investing and including only impact investments made within the last two years, we were able to create a map that accurately represented the current impact investing activity in the Twin Cities. The map proved to be a useful tool in showing stakeholders where they fit within the ecosystem as well as creating a common understanding of the Twin Cities impact investing landscape. In addition, the map has been equally useful in communicating the breadth of our ecosystem to other communities. The map has been viewed thousands of times online. Susan Hammel presented the map at the Impact Capitalism Summit in Chicago, and Matt Onek, CEO of Mission Investors Exchange, included it as a highlight of his summer in the Mission Investors Exchange newsletter. This inspired Mission Investors Exchange member San Diego Grantmakers to replicate the model to map the San Diego impact investing ecosystem. Stephen Rueff, Director of Entrepreneurial Studies at Minneapolis College of Art and Design, presented the map to his students as an example of an effective systems map.

Identified Key Gaps in the Ecosystem

By interviewing stakeholders from all segments of the impact investing ecosystem we were able to understand the problems of the ecosystem from multiple perspectives. Most issues stemmed from opacity and lack of a shared language with which to discuss impact investing. The language of impact investing has been cobbled together from traditional investing and philanthropic jargon and is inconsistent from organization to organization. Furthermore, neither potential investees nor investors knew where to look to find deals or learn more about impact investing.

Built Interpersonal Connections Between Ecosystem Silos

In all stages of this project, we have made a deliberate effort to bring ecosystem members from all types of organizations to work together on common goals. Integral to this process was removing the power dynamic of funder-fundee and investor-investee relationships. In both convenings for this project, stakeholders were brought together discuss the impact investing ecosystem in a context where any dealmaking or brokering was left at the door.

Provided a Platform for the Most Innovative Impact Investing Ideas

In the second phase of this project we surveyed stakeholders for bold ideas that would accelerate the impact investing ecosystem. From the 46 ideas that we received, the project partners—Bush Foundation, Impact Hub MSP, Cogent Consulting—chose the 12 that we thought would be most effective. These ideas included a method of securitizing impact investments, a vehicle for charitable investments into businesses, and a for-credit student impact lab. At the Second Impact Investing Convening on November 10th, each of the ideators was given 5 minutes to present their bold idea to the 79 impact investing ecosystem members in attendance.

Convened Ecosystem Around Ideas With the Most Energy

In the third phase of the project, we organized and facilitated meetings around the ideas that received the greatest response during the convening. In these meetings we are bringing together stakeholders from all segments of the ecosystem to refine the ideas and outline the next action steps. The ideas we are convening are:

• Mainstream impact investing securities: What if we securitized small business and affordable housing loans in order to build a marketplace for tradable, liquid, impact investments?
• Wolf Den: What if we had a “Shark Tank” for social purpose companies that built the deal flow pipeline by providing technical assistance to entrepreneurs?
• Charitable Investments into Business: What if there was a not for profit organization that allowed accredited and unaccredited investors to easily invest in social purpose businesses and nonprofits?
• Diversity, Equity, and Inclusion in Impact: What if we build the impact investing ecosystem to differ from traditional investing by embedding diversity, equity, and inclusion in all stages of process?
• Crowdfunding in Impact Investing: What if we used the new MNvest legislation to draw unaccredited investors into impact investing through crowdfunding?
• Cohesive Communications Platform: What if we attacked the opacity and language issues of the impact investing ecosystem by creating a cohesive communications platform that connected investors, investees, and the public in an intentional and transparent way?

Minnesota is famous for its Midwestern modesty. Despite all efforts to stay under the radar, our philanthropic community is leading the nation once again. In fact, with $18.6 billion in foundation assets, Minnesota is a powerhouse on the national impact investing scene.

Working together, with leadership from the Minnesota Council on Foundations (MCF), we have launched a $20 million impact investing collaborative to benefit affordable housing and small businesses in our state. Already, there is more than $17.1 million committed to the collaborative, and the fund is on track to exceed $20 million. The money is invested in a fixed income bond fund focused on affordable housing and small business lending throughout Minnesota. 

Long known for their generosity and innovation (Minnesota consistently ranks near the top for charitable giving), forward-thinking foundation leaders asked, what if we could access our invested capital for mission? Sometimes referred to as “the other 95%” (since most foundations follow the 5% giving budget set by the IRS), they wondered if they could put this additional money to work generating a financial return AND a social impact, also known as “impact investing.”

Minnesota’s Secret Sauce
People ask, “What’s your secret sauce in Minnesota?” As Senator David Durenberger, former Citizens League board chair said, “Minnesota combines Scandinavian idealism with Yankee practicality.” In other words, our foundations didn’t just talk about the idea of investing for good, they explored how it would actually work with investment dollars on the line. Using investment capital means all the usual fiduciary rules and expectations apply. Would this fly with the investment experts, trustees, officers, committees, financial advisors and investment consultants who advise foundations?

At the May 2016 Mission Investors Exchange bi-annual conference in Baltimore, Minnesota attendees heard about the Michigan Council on Foundations impact investing initiative. The 11 Minnesota leaders wondered: Could such an effort work in Minnesota? Thanks to Bush Foundation’s support for the MCF new (in 2016) executive in residence program, we had the resources to explore the idea.

In September 2016, 12 foundation leaders gathered at MCF to discuss investing together to benefit our region. The presence of these critical influencers helped everyone get comfortable with the concept. Their idea would help other foundations get involved in impact investing, bring more impact capital into the region and strengthen the market for affordable housing and small business securities. The beauty of the initiative is that it appeals to the diverse interests and requirements of all types of foundations, from those who are brand new to impact investing to those who’ve been doing it for decades.

Three Leaders Anchor the Collaboration
Leading the way for others to invest are the three lead anchor investors: The McKnight Foundation, the Bush Foundation and Otto Bremer Trust. Each of these lead anchors bring their own perspective and requirements to the table. The Otto Bremer Trust has been impact investing for decades through its regional banking network and program related investments. For Elizabeth McGeveran, who heads impact investing for The McKnight Foundation, this impact investing collaborative fits nicely into its strategy to align more endowment capital with mission and build the impact investing field. Having funded MCF’s impact investing executive in residence program, the collaborative fit the Bush Foundation’s interest in supporting private sector solutions to community problems.

As part of her futurism work MCF President Trista Harris predicts that activating 100% of foundation assets for mission will become the rule rather than the exception. Over and above charitable giving, accessing endowment and corpus capital means more money working for good in our communities. Together with the MCF team led by Alfonso Wenker, I am thrilled to see our philanthropic community stepping up to make the future happen here NOW. In fact, MCF is not just leading and coordinating this initiative; they’re investing a portion of their investment capital as well.

In addition to the three lead anchors and MCF, there are at least eight other first-mover foundations actively bringing this opportunity through their internal review processes. These include the Initiative Foundation, The Minneapolis Foundation, Mortenson Family Foundation, PFund Foundation, Schnieders Family Foundation, Sundance Family Foundation and other community foundations, small family foundations and rural-based foundations. 

More Information
We welcome all investors, of any size, to join us in this initiative. For more information:

• MCF members, please contact Susan Hammel.
• Other foundations and institutional investors of any size, please contact Janet Quarberg at RBC Access Capital.

For an overview of the impact investing collaborative, a news release and more, see MCF’s Impact Investing page. 

Tweet me (@susan_hammel) or send your thoughts ([email protected]). I look forward to hearing from you.