Redefining Risk in Impact Investing

Though Bonnie Wong, former Investment Manager with Vancity’s Community Capital team discussed risk explicitly at several points in her presentation, the theme of re-defining risk in the field of impact investing resonated through all presentations and conversations at “Making an Impact through Social Finance”.

The Canadian Global Impact Investing Group (CGIIG), held this event for a mixed audience of investors, students, business and political leaders in downtown Vancouver on Wednesday, November 23rd, 2011. CGIIG (which you can read about and join here) was founded in 2011 to raise awareness around the growing field of impact investing in a Canadian context and to connect investors with social ventures. This event invited 4 speakers representing different organizations to present on their activities in the impact investing space.

Jocelyn Ling from the Vancouver chapter of Acumen Fund spoke about guiding themes of the organization: patient capital and moral leadership. Jocelyn used Acumen Fund’s investment in WaterHealth International to illustrate the innovative, risk-taking approach of the organization. Today, over 4 million people have access to WaterHealth International’s clean drinking water and the enterprise has catalyzed an industry in clean water provision.

Vancity’s Community Capital team represented the biggest impact investor at the event, with $80 million in assets under management. Vancity recently announced and publicly launched their new high impact social enterprise lending and investment program, Resilient Capital.

The Global Catalyst Initiative, a local grass roots organization that invests in emerging entrepreneurs in developing countries, was represented by its President, Sean Peters.

Sean’s organization aims to bridge the gap between early-stage entrepreneurs and social enterprises that are “Acumen-ready”, e.g. in a position to take on $250K or more in financing to fuel their growth. Sean summed up the energy of this organization when he appropriately said, “to us at GCI, risk is really exciting”.

Brady Josephson, Director of Marketing and Communications at Opportunity International Canada, explained the organization’s rural agriculture finance model. Opportunity International works towards poverty alleviation through the provision of microfinance services, training and counsel. It was interesting to learn about the organization’s “informed lending” approach, which involves crop profiling, household profiling, and land mapping, collectively aimed at making financial services accessible to the base of the pyramid, but with a conscious effort to avoid over indebtedness.

All four of these organizations were well represented through charismatic story telling and compelling business models. Following the presentations, the floor was opened for questions from the audience. Some of the themes that emerged from this and the subsequent post-event conversation included:

  • Failure and challenges in the field of impact investing
  • How can risk, return, and impact be evaluated together?
  • The implications of the “demand side”: as the capital available through impact investing grows, what kind of support is being provided to social entrepreneurs?
  • How can these ideas become more mainstream?

Overall, the evening was informative and inspiring. It was a great opportunity for impact investing supporters in Vancouver to learn and network. We are looking forward to the next CGIIG event!

Photo credit: http://www.flickr.com/photos/benandjenn/3570635394/

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