Article was originally posted by our good friend Robert Kim on his personal blog. We are grateful to have his insights on this great panel at the Social Capital Markets (SOCAP) Conference 2018. Furthermore, we appreciate his leadership and amazing work in this particular setting!
— by Robert Kim
This October, I had an amazing opportunity to moderate a panel on faith-driven impact investing at SOCAP. This was a special moment for me as this panel allowed me and the panelists to share about Jesus at one of the most prominent yet secular gatherings of impact investors and social entrepreneurs.
Three panelists were Bryce Butler (Founder of Access Ventures, a private operating foundation committed to deploying 100% of its assets to impact investments), Gloria Nelund (Founder of TriLinc, an impact private debt fund that has deployed approximately $1 billion in emerging markets), and Todd Johnson (CEO of iPAR, an innovative impact reporting / analytics app that allows investors to monitor impact across asset classes). I was incredibly encouraged and grateful for their enthusiastic "yes" to join this panel and share about the role their faith has played in shaping their impact investing journey.
I'd like to share a few points from the panel:
1. Understanding the purpose of capital and pursuing a healthy relationship with money is the first step towards a rewarding journey in impact investing. Too often, our goals and behaviors are influenced by fear and greed that stem from idolizing money. Truly embracing the perspective that money is just a tool liberates us to explore what money, and furthermore capitalism, can do other than simply meeting our own needs or, worse yet, feeding our insatiable greed to want more. Such freedom allows us to use money as a resource to pursue the very calling God has equipped us for. It enables us to creatively use all types of capital - philanthropic and investing - as a resource to benefit communities in need (physically and spiritually). Convinced that all assets belong to God, Bryce is directing 100% of Access Ventures' assets to pursue the foundation's mission (not just the 5%, required by the U.S. government). This model allows the foundation to catalyze a lot of the important work for communities in need, using both philanthropic and investing capital. For example, Access Ventures uses its philanthropic capital to meet the immediate needs of a homeless community (e.g. food and clothing, etc.) in Louisville and uses the investment capital to invest in sustainable solutions that help prevent homelessness for families at risk (e.g. affordable housing).
2. Jesus' love compels us to create new ideas and solutions to tackle some of the pressing societal needs. For example, TriLinc has structured innovative investment vehicles and processes to give retail investors opportunities to make impact investments (impact investing has been and still is largely available to accredited investors only, so democratizing access to quality impact investments has always been a need in this industry). Under Gloria's leadership, TriLinc is changing the narrative that only the wealthy has the ability and opportunity to create impact through investments. TriLinc is just one example - there are many more (e.g. a private equity firm has developed a process to help Christian entrepreneurs integrate their faith into the companies' operations and culture. Various Donor Advised Funds are 're-imagining' the role of philanthropic capital to not only support non-profit organizations but also invest in faith-driven social entrepreneurs). God's love compels us to innovate and push the boundaries of existing paradigms for the sake of communities in need.
3. Lastly, our panel session touched upon the need to grow the faith-driven impact investing ecosystem. While I am grateful for the opportunity to share about the Christian faith at SOCAP, the Gospel-influenced perspective has been largely missing in the impact investing conversations for the past 15+ years (I fully recognize that BAM and other Christian NGOs have been doing amazing mission-oriented work through micro finance and small businesses for decades. Still, a majority of Christian investors and organizations have not been actively involved in shaping the impact investing industry).
Fortunately, this is changing.
More Christian investors - both individual investors and institutional organizations - are looking to deploy investment capital for financial, social, and spiritual returns. Very exciting!
I'm excited for two reasons: for one, more capital will flow into sustainable mission-oriented companies that can help share the story of Jesus. Secondly, Christian investors will have the opportunity to share the "why" behind their impact investing journey with peers in impact investing industry and share about the love of Christ.
As we come together and prayerfully support the growth of this ecosystem, we will likely need to address some of the questions below (and many more!):
1. What is the definition of faith-driven impact investing?
2. How do we create a culture to embrace a diverse set of opinions and values while focusing on our common faith?
3. How do we maintain the spirit of sacrificial giving while pursuing market-rate financial returns in impact investments?
4. Is it wrong to generate market-rate financial returns through impact investments? Should such a goal be encouraged or discouraged? What are the pros and cons of each perspective?
5. How do we balance the need to evaluate and monitor impact while accepting the fact that spiritual impact is hard to measure?
6. What are some of the frameworks and processes that we can use from the impact investing industry to grow the faith-driven investing ecosystem?
While this ecosystem is relatively young, I'm encouraged to see some of my colleagues from forward-thinking organizations come together to collaborate and prayerfully lay the groundwork to help build up this ecosystem.
The truth of the matter is..there is order of magnitude more capital in investing pool than in philanthropic pool. Imagine the scale and depth of impact if an increasing share of the investing pool can be directed for good. This is incredibly exciting.