Part of Cogent’s commitment is to make a lasting impact through changing the way people think about money – thinking beyond the individual level to the larger collective. Like our founder Susan Hammel’s mentor, Paul Wellstone said; “We all do better when we all do better.”
One way Cogent has worked towards upholding this mantra is through mapping the Twin Cities Impact Investing Ecosystem. This project, which began in 2016 thanks to support from the Bush Foundation, allowed our local community to better understand the breadth and complexity of impact investing activity in the Twin Cities and subsequently identified a substantial gap- equity investments are not going into social businesses, especially those owned by women and BIPOC individuals.
Why is this so important? Social businesses owned by individuals in marginalized communities need equity investment flowing into their company versus more and more debt. So, from this learning, the Investors for Impact Project was born thanks to partnership with the McKnight Foundation, Hennepin County and others. Phase one is two-pronged; an investor needs assessment and research into current promising models.
In conversations with individual investors, it is clear that high-net worth individuals are interested in making equity investments into social businesses. However, there is a disconnect between their desire to invest, willingness to take risks, and lack of connections with women and BIPOC social entrepreneurs.
In the needs assessment, Cogent worked to identify why this gap exists and what it would take to get investors to the next level of commitment. They also looked to local and national models already in existence that might help investors provide this type of capital. Cogent identified an astonishing 59 models, 41 national and 18 local, with more popping up everyday!
Seeing the progress in these innovative models is certainly encouraging. However, social businesses still face the challenge of access, especially for BIPOC and women founders. Minnesota has a culture of modest wealth, which makes identifying potential investors tricky and these entrepreneurs are often forced to rely on funds from friends and family.
And let’s be honest, when people hear the term ‘high net-worth investors’, the image that often comes to mind is that of an older, white male. However, within the Twin Cities Impact Investing Ecosystem there are women and people of color ready to invest in social businesses.
It is Cogent’s goal to bridge this gap in knowledge and connection by bringing investors, investees and intermediaries all together in the same room. Cogent recently hosted a Happy Hour which did just that, bringing together the impact investing ecosystem to learn, connect and commit together. Here is what we asked everyone in the room to do. We invite you to join us!
“Don’t let today be a spark that fizzles out. Before leaving today find an accountability partner and commit to a simple action step you will take in the next 7 days to dream bigger, dare greatly, do good well. Get investing now because there are people waiting on the other side of your decision to be generous and act for good.”
– Megan Lamke, Business for Good Foundation and new partner for our project!
Top of my mind these days is investing in line with Diversity, Equity, Inclusion values. Many institutions promised bold moves after George Floyd was murdered. Who is following through and doing this well? Racial justice requires new pathways for capital flows. I’m excited to be part of the McKnight Foundation’s Groundbreak Coalition, aiming to deploy $2b in flexible capital over 10 years to disrupt the status quo. In Minnesota we are a generous state, a charitable state, a hard-working state: we need to try new approaches to create that famous quality of life for all. We are leading a session on Place Based Impact Investing at the Mission Investors Exchange conference in Baltimore. Reach out if you’ll be there so I can include you in the informal MN meet-ups.
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