FROM CONCEPT TO STRATEGY

1.0 FROM CONCEPT TO STRATEGY: TOTAL PORTFOLIO ACTIVATION FOR IMPACT

Whether termed social, responsible, or impact investing, “A growing number of investors, institutions, and financial professionals are deploying and managing capital to build a more sustainable and equitable economy,” according to a report1 from USSIF, the Forum for Sustainable and Responsible Investment.

Most people investing for impact dedicate a portion of their money to impact investments, often through direct investments. However, a growing number of high-net-worth individuals, family offices, and private foundations are choosing to invest a greater proportion (and sometimes all) of their capital across several asset classes while maintaining the goal of driving positive and measurable social or environmental outcomes.

The following strategy attempts to balance what are often contradictory goals by demonstrating how to assemble an investment portfolio that produces returns competitive with the performance of traditional investments while also pursuing high levels of positive and measurable social and environmental impact. The goal is to prove that investment capital can also be ‘impact’ capital and play a critical role toward improving a world in which resources for growth and prosperity are increasingly limited. However, many forms of social and environmental impact are unlikely to generate competitive financial returns in any asset class; to eradicate poverty and address the impacts of climate change will require mobilization of impact investors who do not require competitive financial returns, along with philanthropists.

This strategy is a product of Santa Clara University’s Miller Center for Social Entrepreneurship. It is also informed by the work of Charly Kleissner and Sonen Capital, who together published the first publicly disclosed study on a seven-year effort to construct a total impact investment portfolio.2 This work also benefits from the rich discussion and experience of 100% impact portfolio members – or “100%-ers” – at Toniic, an impact investor community that both Mr. Kleissner and