Impact Investing & COVID-19

StartingUpGood
Apr 6, 2020 · 5 min read
Photo by Benjamin Suter on Unsplash

COVID-19 has changed — and will continue to change — everything. We are monitoring immediate changes to impact investing, and possible long-term implications for the impact investing field.

Some Curated Sources of Good Information

The GIIN is arguably the leading global impact investing organization. As such, it has consolidated how its members are responding to COVID-19 in a special edition email entitled: A Global Crisis Require a Global Response.

The GIIN’s CEO, Amit Bouri, has been vocal about the important role impact investing can play in addressing the global health and economic crisis created by COVID-19.

His website message frames this role in the larger context of the world’s most pressing problems:

Now, more than ever, the world requires the robust and scalable power of finance to address its most pressing global problems — problems such as climate change and inequality that, just like COVID-19, transcend our international borders. We must be working alongside world governments and non-profits.

Bouri recently participated in an Impact Alpha podcast (paywall) where he discussed how impact investors can contribute to the immediate response to COVID-19, the longer-term recovery after the crisis is over, and the necessity of building resilient systems to prevent future global disasters and promote economic equality.

Bouri also spoke to Pioneers Post on March 27th on how impact investors were supporting their investees during this crisis.

Follow Bouri and The GIIN on Twitter for more timely updates.

Philanthropic consultancy Arabella Advisors is sharing materials for addressing the COVID-19 pandemic.

They suggest impact investors should:

  • Assess how you can best support your investees and reassure them that you will continue to be a source of patient and flexible capital.
  • Look for new opportunities to find solutions to a crisis, such as developing a vaccine, creating continuous access to healthy food in under-resourced communities, or strengthening capital supports for small businesses.
  • Pay close attention to equitable practices. Make sure you are funding a diverse set of entrepreneurs to help build an economy for all.

Check out Arabella’s resource page for updated guidance.

Mission Investors Exchange hosted a Twitter chat on March 19th to highlight how #impinv and #philanthropy can support solutions around the #COVID19 pandemic. Twitter chat hashtag #COVID19impinv is still being used to tag the conversation.

Matthew Weatherly-White of The Caprock Group (a multi-family office and impact investing firm managing several billion dollars) provides some interesting insight into the current actions of impact investors in the introduction to his Impact Alpha article How I invest my own money (paywall) published on March 30th:

Finally, I want to observe that I’d had not one incoming call from an impact-oriented investor worried, stressed and wanting to sell. Not one. In fact, of the incoming calls I’ve received, most are asking about adding to their portfolio, thinking opportunistically, and wondering if now is the time to commit additional capital. While anecdotal, this indicates that impact investors are more long-term oriented, future-thinking, and patient. Since just about every piece of investment advice encourages precisely that mindset in order to be a “better investor”, I’d cautiously suggest that impact investors may simply be… better investors.

Check out Weatherly-White’s Twitter posts for additional insights from the front line.

This impact investing pioneer shares best practices for how it is supporting its network during the COVID-19 crisis.

The Open Road Alliance is a private philanthropic initiative that was founded in 2012 by psychologist and philanthropist Dr. Laurie Michaels to address the need for contingency funds and the absence of risk management practices in philanthropy. It is encouraging impact investors to consider providing bridge loans to support fundamentally strong impact businesses in their portfolio because these loans “are a highly effective tool in specific cases where timing is the main issue.”

ORA’s philosophy is also described in this Impact Alpha (paywall) article:

Impact Alpha is producing wide-ranging content on how COVID-19 is affecting impact investors. Some paywalled and some free to access, the coverage includes perspectives from most, if not all, of impact investing’s leaders and influencers, dubbed “Agents of Impact”.

Check daily for updates. Recent highlights include:

“Resilience and disruption: Agents of Impact share lessons from the pandemic” is described as the post Impact Alpha will use to update readers about “global dispatches” and encourages readers to contribute via editor@impactalpha.com.

Initial contributors include:

  • Heron Foundation’s Clara Miller
  • Blueprint Local’s Ross Baird
  • Kellogg School of Management’s Megan Kashner
  • Michael Whelchel of Big Path Capital

Impact Alpha is also covering how global behavior change caused by the COVID-19 pandemic could represent the “long-predicted sustainability disruption.”

More to come as we continue to monitor impact investing’s response to COVID-19.

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