Top 5 Impacts of the Twin Cities Impact Investing Ecosystem Project

ON April 19, 2017

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?

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What I'm doing now

The tide is turning: more people are thinking about their moral, social and environmental values when they shop, play, and invest. Impact investing is going mainstream with more robust and consistent impact measurement and monitoring happening every day. The blowback on ESG (Environmental, Social, Governance) makes true impact investing (which requires impact measurement) all the more relevant. Will changing how people view money change the world? Well, it isn’t a panacea for all that afflicts us but as they say, “follow the money”. Investors have power. Use yours wisely.