This is what impact investing is—and why Fort Wayne should be talking about it

Stephanie Gripne was offered her first business when she was 12 years old.

She bought her first stock when she was 13, and at age 17, she bought her first socially responsible stock, Enron.

That’s when she learned how volatile investing in Wall Street could be. Dr. Stephanie Gripne

“My first stock, Micron, did well; however, when I purchased Enron stock, I was exposed to governance and fraud in public markets,” Gripne says.

Her father was a “workout guy” who would take companies moving toward bankruptcy and try to save them—or save parts of them. The company he saved and grew, Idaho Precast & Concrete, became the top precast concrete company in Idaho.

As such, Gripne’s father groomed her in business and told her she had a mind for it, so when she announced that she wanted to be a wildlife biologist, he initially pushed back on the idea. He told her that if she cared about the environment, she should make a lot of money in business and then use her wealth to have influence.

The problem was, Gripne had her heart set on making an impact first and foremost, so she turned her back on her father’s teachings and went on to get her MS in Wildlife Ecology and Ph.D. in Forestry instead.

“I had the false belief that if you cared about impact, you’re going to be anti-money,” Gripne says. “I thought: You can’t have both ways.”

But what she has learned—and built her career on—is that, in fact, you can.

There’s a way for investors to be earning significant returns on their money and using that money for good at the same time.

It’s a model growing in popularity worldwide known as “impact investing.”

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In 2012, Gripne founded the nonprofit Impact Finance Center (IFC) in Denver, CO.

Since then, it’s become the world’s largest multi-university academic center devoted to identifying, training, and activating individuals and organizations to do impact investing nationwide.

In 2016, Forbes magazine called her the “Steve Jobs of impact investing,” creating an innovative movement around it in Denver and expanding that movement one city, one project, one investor at a time.

So what is “impact investing” in the first place?

While the answer is long-winded and layered, the underlying concept is surprisingly simple: It’s doing well financially by doing good.

Gripne speaks to a crowd of potential impact investors at the IFC's biannual CO Impact Days event.

As a society, we’ve been conditioned to think about our money in two buckets: The money we give away as philanthropy to do good, and the money we invest to earn a profit.

But what we forget is that the money we’re giving away has a negative 100 percent financial return, yet we’re expecting it to carry the heavy burden of our social impact projects, Gripne explains. Meanwhile, the money we’re investing to make a profit is often being funneled into companies that don’t necessarily strengthen our communities or align with our values.

Impact investing is what happens when we pause and take a step back from traditional funding models, and ask: Is there a better way to achieve our goals?

It’s thinking creatively and strategically about investments to stretch them to go further and to create win-win-win scenarios that allow investors, beneficiaries, and communities to rise together.

While you might not have heard the term before, the concept of impact investing has technically been around for a long time, says Tony Macklin, an Independent Philanthropic Advisor in Fort Wayne. Tony Macklin

“It’s really individuals and churches that have the longest history of aligning their investments or their spending with their values,” he explains. “Then the business world and the nonprofit world caught up to them later on.”

Also known as “sustainable investing,” it may sound like something “progressive” coming out of Colorado, but at its root, it’s about realizing that all money has an impact—whether we pay attention to that impact or not.

“It’s conscious use of assets, period,” Macklin says. “Whether you’re spending, investing, saving, giving, it’s aligning your values across all things over time.”

As such, impact investing is starting to be seen as a highly underused asset in the investing toolbox—and one that's rising in popularity among millennials and institutional investors alike.

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Macklin is one of a handful of Fort Wayne residents who has been inspired by impact investing’s potential to reshape the national investing landscape—and one of three local residents who currently works on Gripne’s team. Greg Sherman

He volunteers for the IFC as a Senior Advisor. Fort Wayne residents, Greg Sherman, an Independent Management Consultant, and his wife, Karen Eller, an Independent Fundraising Consultant, work for the IFC, too.

Sherman and Eller met Gripne in Denver and helped her get the organization off the ground in 2012. They have been with her ever since—he as a Senior Operations Advisor and she as a Senior Philanthropic Advisor.

The fact that three IFC team members happen to live in Fort Wayne today is a mere coincidence, Eller says. But since she, Sherman, and Macklin are working remotely, they see great potential for impact investing to take hold in Fort Wayne and move the needle on social issues here.

“Our biggest lever for social change is our investment portfolio,” Eller explains.

The trouble is where our money is going. While the majority of any local community’s resources flow outside of that community in today's global marketplace, impact investing can help investors redirect their money to support local and solve issues in their own communities instead. Karen Eller

That’s one of the easiest things to grasp about it, Sherman says. It has significant capacity to help communities invest in themselves and address systemic challenges that may not be effectively confronted—or even approachable—in other ways.

“It’s investing in your community in a way that’s really tackling a need that’s not addressed by the current market system,” he explains.

For example, the project that first convinced Gripne of the power of impact investing was a rent-to-own housing deal she structured with her father.

Combining their resources, they purchased a handful of houses in a small town in Wyoming and began offering a rent-to-own concept to individuals who had been financially tanked by medical bankruptcy.

In other words, they were investing in people who were credit-worthy, but the system wasn’t set up to give them a loan.

So the Gripnes created an affordable housing model that gave these renters partial equity of their rent and all equity above a 10 percent return.

In doing so, they earned a financial return on the deal as investors, their renters earned equity at better-than-market rates, and their community ultimately benefitted from having more homeowners.

Win. Win. Win.

“That was the moment when what I was taught by my father collided with my passion for service,” Gripne says. “It’s this acknowledgment that if you really do care about what you’re passionate about, you can’t solve it without changing the flow of resources toward it.”

***

That’s what the IFC has set out to do: Help investors of all types and capacities change the flow of their resources to harness the power of capitalism for good.

So how did the IFC come about?

CO Impact Days focuses on identifying, educating, and activating individuals and organizations who have the potential to become impact investors for social ventures.

Gripne realized the need for a nonprofit multi-university academic center to build a movement around impact investing when she was a business professor at the University of Colorado.

While there, she saw universities across the country encouraging students to innovate and launch businesses and organizations to solve social issues. But she also saw a lack of investing models that could help these innovators get their ideas off the ground.

“You have people needing capital, but you don’t have the same infrastructure identifying, educating, and activating the capital to support them,” Gripne says.

So she set out to provide that infrastructure, creating a variety of impact investing models for investors of all types—from family foundations to community foundations, to individuals, governments, nonprofits, and corporations. You name it.

That’s the beauty of impact investing, Macklin says. There’s a model for essentially everyone who wants to do it on any scale. It can be as simple as the personal decision to not support companies that do animal testing, or as drastic as large, corporate foundations reconfiguring their grant dollars to grow endowments. And just like any other investment, impact investing deals can be structured to satisfy risk appetites ranging from conservative to liberal.

Tony Macklin of Fort Wayne hosts a workshop at the IFC's CO Impact Days.

In Indiana, Macklin sees examples of impact investing already happening among small family foundations or wealthy people of faith who are using tools to align their beliefs with their investments. It’s just a matter of making these examples better known and replicable in the broader community.

To do that, the IFC has created a common language to talk about impact investing in Colorado and beyond, he says. It’s building a culture and system of education around the concept with the ultimate goals of catalyzing investments of more than $1 trillion and creating a Nationwide Impact Investing Marketplace by 2030.

But there are barriers to achieving these goals.

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For individuals wanting to do impact investing on a small scale, there’s often a lack of time to research the best options for purchasing or giving to socially minded businesses and organizations. There are also barriers in the system of what the average individual can achieve with their finances, Macklin says.

“Sometimes it’s as simple as, ‘I want to have a savings account that does good by the world, investing in the environment or women-owned companies, let’s say, but my bank or 401k might not support that option,’” he explains. “It’s hard to say, ‘I can simply move my 401k to somewhere else.’”

For larger entities, like high-net-worth individuals and foundations, there are more options available and financial advisors to walk you through the process, but mental barriers still exist.

“You get more into the myth of the tradeoff of financial returns versus a social impact,” Macklin says. “That hesitation is pretty baked into investment committees of institutions, foundations, universities, and pensions. Even though multiple data sources show you don’t have to make the tradeoff between financial returns and social returns, we still have that in our heads.”

So the IFC is working to normalize impact investing, to give investors the facts, and to let more people know what options actually exist.

One of the key ways it does this is through its biannual CO Impact Days event coupled with its Impact Investing Institute.

The IFC launched CO Impact Days in 2015 as a three-year effort to catalyze $100M of investment in social ventures in Colorado at the first-ever statewide marketplace for impact investing. CO Impact Days functions as a farmers market of sorts for nonprofit and for-profit ventures to sell their ideas to investors. Another aspect of it is the Institute, which helps investors ease into impact investing while streamlining the process for them.

“It’s good exposure to the options, and it helps normalize the conversation around impact investing, which is something the IFC has done really well,” Macklin says. “It’s normalizing that, ‘Yeah, your interest in doing good with your money is valid, and there are things you can do—ways you can invest—and you’re not alone in asking these questions.”

A workshop at CO Impact Days.

Gripne says what has made CO Impact Days particularly successful is that it focuses 75 percent of its efforts on the IFC’s three goals of identifying, educating, and activating individuals and organizations who have the potential to become impact investors for social ventures.

In other words, it’s acting as an accelerator for money in the Colorado community.

“Accelerators identify, educate, and invest in social entrepreneurs, either nonprofit or for-profit,” Gripne says. “We’re like the accelerator for the money. We identify, educate, and activate the money to invest in the startups or nonprofits that make the world a better place to live.”

***

In the last seven years, the IFC’s work has evolved Denver’s investor and startup scene, showcasing more than 150 social ventures and connecting them to mentors, partners, and impact investment capital.

“Early estimates indicate that 260 direct impact investments of $261 million have been completed, in addition to upgrading the governance of several asset owners,” the IFC’s website reports.

“I tell people the first two transactions took us three years; the last 100 transactions happened within three-to-six months,” Gripne says. “They’re happening so fast now, they don’t even touch us unless there’s a problem.”

The IFC's team at CO Impact Days.

As the IFC works to replicate the success it’s had in Denver in communities across the country, it has Fort Wayne—and Indiana, as a whole—in its sights.

While more traditional Midwestern cities and states might think they can’t replicate Denver’s success with impact investing, that’s actually not true, Gripne says.

Technically, Indiana is already ahead of where Colorado was when she launched the IFC because the Hoosier State already has a strong philanthropy culture and nonprofit sector. It’s just a matter of making the language and models of impact investing better known here, changing mindsets, and daylighting powerful, local examples of where impact investing is already happening, she explains.

As a Fort Wayne resident, Eller is eager to see conversations about impact investing gaining momentum in northeast Indiana. Earlier this year, the Community Foundation of Greater Fort Wayne Inc. invited Gripne to speak with area investors, corporations, and nonprofits, sharing examples of impact investing in cities like Philadelphia where it’s taking off.

“The goal is to help communities like Fort Wayne develop their own success stories in impact investing and populate a PowerPoint with examples of their own,” Eller says.

To make that happen, the IFC works with partner organizations in cities across the country, like community foundations, that play a vital role as a gateway for impact investing and moving the conversation about it forward.  

Eller hopes Fort Wayne leaders across all sectors will continue to engage in these discussions.

“We’re so grateful to the Community Foundation in Fort Wayne for having these dialogues,” she says. “Let’s keep up this momentum.”

If Fort Wayne is receptive to impact investing, the IFC has a Main Street Loan Program that it could bring to the Summit City tomorrow, Gripne says. This character-based financing option for small business owners gives investors a guaranteed 103 percent return on their investments.

Another option is to start a giving circle in northeast Indiana. For example, the IFC helped launch a $2 million loan program for women and people of color in Oregon, working with Colorado Lending Sources and local, Oregon-based partners.

A 2019 Impact Investing Women's Giving Circle.

Next year, Eller plans to help map out a “Who’s Who” directory in Indiana for impact investing to explore the feasibility of a giving circle here.

It’s all about finding what’s right for communities and crafting models that fit their needs, Gripne explains.

“We’re like financial plumbers,” she says. “We have the skillset to do any transaction, and we’re more interested in helping communities like Fort Wayne set up their own infrastructure to do impact investing.”

The need for impact investing in cities like Fort Wayne is poignant, too. As a culture of entrepreneurship takes hold in the city and longstanding nonprofits vie for the same pool of resources, coming up with innovative ways to stretch dollars to go further and help them move the needle on social issues is key, Eller says.

Impact investing can remind places like Fort Wayne that the capital needed to solve problems in their communities may already be there. It’s more a matter of identifying that capital and asking investors to put it to more efficient use.

“There are untapped resources out there to systematically elevate the quality of life in our city,” Eller says. “Impact investing operates from a place of abundance. It reminds us that there’s more capital out there than we are really putting to work—if we could just reframe how we talk and think about money. It’s exciting to imagine the possibilities for this in Fort Wayne. Let’s harness the capital we have and change the paradigm on social issues here. We all have the power to take our investments to the next level. Let’s do it.”

Tune in for our series

To move the conversation on impact investing forward in northeast Indiana, Input Fort Wayne is partnering with the Community Foundation of Greater Fort Wayne Inc. and the Impact Finance Center to share concrete examples of where and how impact investing is already happening in northeast Indiana.

To share an idea, contact [email protected]. In particular, we’re looking for examples of individuals who are already doing socially responsible investing or using microlending platforms like Kiva or Accion. We’re also interested in talking with financial or wealth advisors who are helping clients look at socially responsible investing, Biblically Responsible Investing, or similar options.

Read more articles by Kara Hackett.

Kara Hackett is a Fort Wayne native fascinated by what's next for northeast Indiana how it relates to other up-and-coming places around the world. After working briefly in New York City and Indianapolis, she moved back to her hometown where she has discovered interesting people, projects, and innovations shaping the future of this place—and has been writing about them ever since. Follow her on Twitter and Instagram @karahackett.
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