Mainstreaming Impact Investing & Thinking BIG
A few weeks ago, world leaders gathered in Davos, Switzerland to map a path forward for accelerating the flow of capital into impact investing, a discussion which was facilitated in partnership between the World Economic Forum and member firms of Deloitte TTL*.
A group of approximately 50 participants – including multibillion dollar hedge funds, private equity firms, sovereign wealth funds, asset managers, financial services companies, foundations, and social enterprises – spent over two hours brainstorming and debating on how to accelerate – and “mainstream” – the flow of capital towards impact investing. To learn more about the insights from that event, read this blog post written by Chris Harvey, Deloitte’s Global Leader for the Financial Services Industry and Global Lead for Major Financial Institutions.
Coming out of this discussion, Deloitte and the World Economic Forum are now crafting a strategy for institutional investors to approach impact investing in new and creative ways.
In the months ahead, there are a few other large, global initiatives coming up that give attention to the impact investing space: The Skoll World Forum on Social Entrepreneurship will convene social entrepreneurs, thought leaders, and strategic partners in April at the Said Business School in Oxford to exchange their ideas and solutions. Meanwhile, the British Prime Minister David Cameron is said to throw his weight behind plans for financial innovation and impact investing. Cameron will use the UK’s presidency of the G8 this year to develop new agreements on impact investing and social impact bonds. (See here for more about Cameron’s plans.) And finally, at CGI America in June of this year, innovation in the community finance space will be on the agenda.
My hope is that through these meetings and other initiatives, bigger and bolder investment vehicles and action tanks will emerge that can channel the collective power of civil society, the private sector, and the public sector.
Many will agree that a successful impact investing market won’t emerge overnight. Different sources of capital, including philanthropic capital, will likely be needed to build the impact investing market.
Philanthropy plays a critical role in building supportive ecosystems and markets, as my colleagues Harvey Koh and Ashish Karamchandani laid out with the Acumen Fund in our 2012 report From Blueprint to Scale: The Case for Philanthropy in Impact Investing. As Chris Harvey adds in his blog, patient capital is needed to make sure that the economics of individual deals and value chains work.
To truly achieve bigger and bolder initiatives, I would add another priority to this list of uses of philanthropic capital: To enable bigger and bolder solutions, today’s impact investing leaders should be given the time and bandwidth to think big … collectively.
In the few years that I have been working in the space, I have had the opportunity to work with some of the smartest leaders and biggest thinkers one could hope to interact with. But the bandwidth is often lacking to allocate resources to promising ideas that may not bring results tomorrow but that have the potential for long-term transformation. Instead, many of these visionaries are required to keep their eyes on their short-term goals.
What if the resources can be gathered to bring these leaders together in a concerted, longer-term effort to drive “collective action at scale”? Will bigger things happen? And what would a “bigger effort” look like? Who can we learn from and with along the way?
These are some of the questions that keep me up – and dreaming – at night. In the year ahead, I am looking forward to pushing for action together with my new colleagues at Monitor Deloitte and the rest of the Deloitte family of member firms. In the meantime, I welcome any questions, reactions, or answers, you may have to my questions already.
Note: Joel Bryce, senior consultant at Deloitte Consulting LLP contributed to this blog. We welcome any reactions and/or suggestions you may have for us. Contact Carolien at @cdebruin08 or cadebruin@deloitte.com.
*As used in this document, "Deloitte" and “Monitor Deloitte” refers to certain member firms of Deloitte Touche Tohmatsu Limited (DTTL) that participated in the acquisition of the business of Monitor Company Group Limited Partnership (Monitor). Each of DTTL and its member firms is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms. Certain services may not be available to attest clients under the rules and regulations of public accounting.
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