Shared Framework

Twin Cities Impact Investing Ecosystem Shared Framework

A diverse group of Twin Cities based investors, entrepreneurs, advisors and field builders are working together to grow and mainstream a different kind of investing: investing for positive social, environmental impact. We seek to increase the flow of impact capital between capital sources and end-users. We invite you to join with us, bring your own experiences with and passions for impact investing and create something larger and more powerful together.

Background

In February 2016, a group of independent impact investing practitioners and field builders operating out of Impact Hub MSP proposed a collaborative ecosystem planning process with the goal of scaling and mainstreaming impact investing in the Twin Cities. The Bush Foundation funded the project, which was then implemented by Cogent Consulting in partnership with Impact Hub MSP.

In the first year, the project, which has since become known as the “Twin Cities Impact Investing Ecosystem Project,” had three parts. In the first part, the group mapped the current impact investment ecosystem in the Twin Cities and analyzed gaps in the ecosystem. The second part entailed imagining the desired, future state of the Twin Cities impact investing ecosystem. The third part focused on empowering the ideas and solutions generated and drafting a shared framework for building the desired ecosystem moving forward.

As a response to the gaps identified in the mapping part of the work, this Shared Framework was initially drafted by the Cogent Consulting team in collaboration with Huli Consulting, based on insight gleaned from managing the project over the first year and previous years dedicated to the movement. Cogent then requested feedback on and support for the draft from the HUB and the Project Advisory Team, consisting of ten ecosystem members and project stakeholders. We acknowledge that more can always be done to build even broader consensus (putting even more “shared” in the “shared framework”), yet we believe this framework has the baseline support necessary to guide our actions as we move forward, independently and yet, together.

Overarching Values

  1. Diversity, Equity, and Inclusion (DEI) — We seek to engage more marginalized communities in co-creating our ecosystem as sources of capital, end-users of capital, intermediators, and field builders. Under-represented communities include women, people of color, LGBTQ, socio-economic disadvantaged, older adults, youth, vulnerable, and veterans.
  2. Real, Measurable Social Impact — We believe that impact investments are essential in creating a large variety of positive environmental and social impacts and there are many approaches to measuring impact. Each of us recognizes that while some impact investments may not overlap with our personal priorities, as a community, we commit to real, measurable social impact.  
  3. Innovation — We recognize that in order to truly mainstream impact investing, new ways of investing and new business models that are outside of today’s norms need to be created.  As an ecosystem, we encourage innovative approaches and risk taking such as integrated capital, also called blended capital, as well as new financial products.
  4. Transparency — We actively encourage more openness about impact investing opportunities, activity, and results. We will be a voice to encourage investors and entrepreneurs to share procedures, successes and failures.

Our Ecosystem Shared Pillars

PILLAR 1: Commit to Shared Definition & Common Concepts

We use the World Economic Forum’s definition of impact investment, “Impact investing is an investment approach intentionally seeking to create both financial return as well as positive social or environmental impact that is actively measured.” We recognize that impact investing is a “Big Tent” and includes a variety of intended impacts, preferences for impact measurement, financial return expectations, asset and entity types.

ACTION STEP: Discuss this definition of impact investing and existing shared conceptual frameworks and, if necessary, emerge with a proposal for updating them. Work toward consensus and a common commitment to using language consistently.

ACTION STEP: Work toward establishing common definitions and frameworks for terminology and concepts that often intersect with the impact investing movement such as “social enterprise,” “social business,” and “social entrepreneur.”

PILLAR 2: Measure Impact and Success

Our goal is to scale and mainstream impact investing in the Twin Cities. As we grow, it is increasingly important to define what success looks like and how that success will be measured, when, and by whom. This will help us to prioritize our time and resources, as well as help us know if our various efforts are working or not.

ACTION STEP:  Work toward establishing a common framework, such as the UN Sustainable Development Goals, that all members of the impact investing ecosystem can use to identify the types of impact they are seeking to advance.

ACTION STEP:  Identify expert resources to determine appropriate metrics and measure results.

PILLAR 3: Communicate and Increase Access

We believe our ecosystem needs a basic online presence that promotes our shared definitions, values, vision, and framework and serves as a central node for communicating about the impact investing activity happening in the ecosystem. Our online presence should be clear, consistent, and regularly updated.

ACTION STEP: Discuss how can we use more relatable language to mainstream impact investing conversations. What tools are required to push these conversations into more spaces?

ACTION STEP:  Add to the new social media presence for the ecosystem and build a website that expands access to, from and within the ecosystem.

PILLAR 4:  Support Promising Solutions

Our community will aggressively develop solutions, in whatever form they might take, that can open up new sources of impact capital to the ecosystem, reduce transaction costs or otherwise facilitate the flow of impact capital from existing sources, and/or help create more and higher quality investment opportunities ready for impact capital.

ACTION STEP:  Support, participate, and promote promising new and existing solutions including:

    • Finnovation Lab/Impact Hub Collaboration, Fellowships and Accelerator
    • Venn Foundation
    • MI3 (Minnesota Impact Investing Initiative)
    • ConnectUP! MN
    • CDFI’s of color: Catalyst, Meda, NDC
    • Bush Foundation Social Business seed fund

ACTION STEP:  Nurture the growing momentum around the following impact themes:

    • Affordable Housing community innovations
    • Clean energy sector emerging solutions
    • Vulnerable people
    • Sustainable agriculture
    • Economic justice

ACTION STEP:   Prioritize solutions that address the gaps identified in our ecosystem through the mapping work in 2016-17. First and foremost, the map shows a need for early stage high risk capital for innovative entrepreneurs and disruptive impact.

ACTION STEP:   Emphasize solutions that increase impact investment activity across a variety of impact areas over time.  

ACTION STEP:   Encourage all of our infrastructure projects to work together, promote each other, and find practical ways to help each other find traction.

PILLAR 5: Develop Talent

Our ecosystem believes in the power of people to create change. To advance the practice of impact investing, we will each do our part to develop impact investing skills and experiences for diverse people all across the ecosystem.

ACTION STEP:  Bring colleagues who are new to the ecosystem and from marginalized communities to impact investing events and connect them to our social media presence.

ACTION STEP:  Consider who is not involved who should be when attending other ecosystem events: reach out to your networks.