Archive for category: Georgia Social Impact Collaborative

March 23, 2019

By: Jeannie Tarkenton, Founder/CEO, Funding University

Being part of the impact investment “ecosystem” these days means you likely have a mash up of issues on your mind because – thankfully – the movement has matured enough to now have factions, detractors, champions, victors and losers. As a social entrepreneur highly focused on solving one problem – in our case, the problem of access to financial products needed to complete college – I have followed the arc of and commentary on impact investing. But I mostly have been playing in my corner, building a business brick by brick with my team, and learning from our early engaged customers. Over the past four years, however, I have gained a weeds-level view of impact entrepreneurialism and investing. I have a bold challenge to put forth to impact investors and to my fellow social entrepreneurs: Invest more seed capital in exchange for more equity.

Investors should acknowledge and embrace that social impact companies are uniquely difficult to get off the ground. Social enterprises work to retrain ingrained systems such as banking, food production, education, workforce training; they often work against social norms, attitudes, and human biases.

If our goal is to bring more socially focused companies to life, impact investors should account for a higher portion of angel, seed and early stage investments in the investment market. I (humbly) push you to include earlier stage investments in your portfolios AND to demand to be richly compensated for your earlier, higher risk, “rocket fuel” position. Take more equity, more warrants, more board seats, and higher interest rates in exchange for your early, patient capital.

And, now, to my fellow social entrepreneurs, I posit that we need to embrace this compact on our side. In tackling a problem that other entrepreneurs found too difficult to address, we must be prepared to:

1) Consider giving up more ownership of our companies early;

2) Be rigorous as to our concepts’ abilities to scale to a stage in which impact investment is not the only capital attracted to our business model; and,

3) Use early stage impact capital in highly focused ways that will catapult us to achieve milestones needed to attract traditional capital to our stack.

Why is this especially important now? Due to a number of factors, “Seed Stage” investments are slowing significantly, and show no signs of bouncing any time soon. (See table.)

As the Seed Stage market tightens, trends show that any investment labeled “patient” or “social impact” will naturally be trimmed from the overall pool. Seed Stage impact investment funds are already fairly rare, with A to C rounds being where most impact funds make their mark.

The upside to investors who may choose to position some of their money in Angel and Seed Stage is that early-stage capital comes with a lot of exciting, hands-on opportunities to chart the path of a company. For multi-generational family office investors this may be an ideal fit in that younger members of the family may already be asking for more involvement in investments. The ImPact wrote a detailed guide to bring these strategies to life.

The Funding U early investors and board members have given our organization valuable insights and support; and, they each have said they, in return, gained priceless insights and energy from being part of our early growth and maturation.

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Jeannie Tarkenton is the Co-Founder and CEO of Funding U, a fintech company based in Atlanta and operating across the US that uses data analytics to provide ‘last gap’ student loans to low and moderate income students who are rejected by banks because they do not have parent co-signers. The Company’s mission is to remove the financial barrier to college completion while limiting student debt load and providing financial and credit education for customers. Funding U accepts debt investments for its loan fund and provides high single digit returns to investors. Atlanta investors include the Fuqua Family Office. For more information, please contact [email protected]

The Georgia Social Impact Collaborative (GSIC) provides resources to connect, educate and inspire stakeholders for the purpose of accelerating the development of Georgia’s impact investing ecosystem. Recently, GSIC announced the launch of the Georgia Social Impact Map (the “Map”), an interactive platform designed to connect and educate stakeholders interested in accelerating impact investing for social outcomes. Intended as a resource for communities around the state, the Map connects new forms of capital to sustaining and scaling solutions to social challenges. GSIC also provides workshops and programming for training specific groups of stakeholders on ways to leverage impact investing to achieve their impact goals, such as the workshop described below, which was attended by 30 leaders of some of GA’s top social enterprises and nonprofits.

February 19, 2019

By: Nikishka Iyengar, Founder and CEO, The Guild

This article originally appeared in Green Money Journal.

Growing up in Mumbai, India’s financial hub, it was hard to escape the pervasive Slumdog Millionaire-esque wealth disparities. Coupled with other issues like gender-based violence, Mumbai served as my primer for recognizing that socioeconomic issues like poverty are a systems issue involving multiple, interdependent systems, and can’t be solved by one or two interventions alone. It also lit a fire in me to use a justice-based lens to dismantle the intersecting systems of oppression that create outcomes where a small percentage of people at the top thrive at the expense — and severe detriment — of the majority at the bottom. That fire stayed with me as I moved across continents in 2007 to pursue a dual degree in Finance and Economics at The University of Texas at Austin. It was an interesting time to be studying those topics. Amid the global financial meltdown, I found myself having more questions than answers about our current economic system of capitalism. I decided to shift my energy to grassroots international development and student organizing instead. As part of an interdisciplinary research study on Microfinance and Sustainable Development in Developing Countries, I spent several summers and winters in South Asia researching grassroots development — including an internship with the Nobel Laureate Grameen Bank in Bangladesh. When back on campus during the fall and spring semesters, I spent time organizing with student-led movements around anti-poverty and climate action campaigns.

At the time, microfinance (specifically microcredit) was being touted as a panacea of sorts to ending extreme poverty. It involved giving small, uncollateralized micro-loans to the poorest of women so they could start businesses and help pull their families out of poverty. Women were the primary targets of these loans for two key reasons: the data showed that women spent a higher percentage of their earnings on the well-being of their families than men did, and empowering women economically meant empowering them socially as well — which was of particular significance for communities with rampant gender-based violence. In theory, this seemed to work well for a few years. Women that were previously left out of the formal economy entirely were able to start micro-businesses and contribute financially to sustaining their households.

However, as microfinance started to scale, questions around its true impact surfaced, and the industry experienced a bubble and crash of its own. One of the main critiques of microfinance was its high interest rate, which often climbed over 35 percent and as high as 80 percent in some markets. Theoretically, the risk/return trade off that institutional finance hinges on justified such high interest rates. The borrowers were the poorest of the poor—often unbanked, without any formal identification, and without collateral to back the loan—thereby making them the most risky investment. But it is important to question who bears the true risk in interventions like this — the lender with wealth or the borrower that is already struggling below the poverty line — and whether there is another trade off at play between scale at “market rate” and real impact. The dark side of microfinance that I bore witness to as part of my research was that borrowers who defaulted on their payments were often left worse off than they were before accepting the loan. The lessons from microfinance, and what I learned subsequently in my career after graduating college, have given me a renewed focus in how I approach my work in this industry of Sustainable Business and Impact Investing.

When it was time to think about life after college, I had the choice to either go back home to India and work on grassroots economic development, or stay and find a job in the U.S. I chose the latter with the understanding that so much of what I identified as the root causes of global problems (i.e., capitalism) had its basis and stronghold in the U.S. So after graduating, I went to work at a management consulting firm — one of the few companies that hired international students who required work visas — where I worked my way to our newly minted social impact and sustainability consulting practice. There, I worked with Fortune 500 clients on their sustainability strategies, helping them transition to renewable energy, implement community impact initiatives, and reduce carbon emissions. Much like my experience with microfinance, what soon became apparent and frustrating — millennials are nothing if not impatient, right? — was that all of our work in corporate responsibility was only having an incremental impact at best. But the severity of the problem demanded exponential and transformative change. As businesses continue their pursuit of relentless growth, wealth continues to accumulate at the top while climate change continues to accelerate at a truly apocalyptic pace. And, increasingly, more middle and low-income communities are stripped of their autonomy and power.

What impact is Sustainable Business and Impact Investing having on a net basis? As impact investing moves from niche to mainstream, it is critical we ask these questions. The majority of impact investing funds today seek a market rate-return, and while the last few decades have proven that investing for impact can indeed be profitable, we need to question to what extent they need to be profitable. As microfinance has shown us, market returns can help achieve scale, but not necessarily impact. Consider the history (and present) of this country’s economy — built by enslaved labor on stolen land and furthered by free-market capitalism that keeps Black and Brown labor in global supply chains oppressed while continuing to extract natural resources at unsustainable rates. What does a market-rate return perpetuate in a market that is based on these fundamentals?

Bringing this line of questioning home, I examine my personal finances by asking myself three overarching questions: How am I making money? How am I investing it? And how am I spending it? As I’ve transitioned from working a job to becoming a full-time social entrepreneur, I routinely ask myself if I’m making money in a way that allows me to have the impact I want, or if I’m unintentionally reinforcing oppressive systems. From an investment perspective, at a minimum, I recommend examining your banking relationship. I opened an account with a credit union last year and am working on fully transitioning out of my current account with a large bank. We millennials love our convenience, and while credit unions don’t always offer the same online banking experience as the bigger banks, they also don’t do the same kind of harm. Most multinational banks fund (with our deposits) private prisons and pipelines that destroy indigenous lands, while community banks and credit unions are more likely to fund small businesses in our communities. If you have an IRA/401K along with a regular savings account, you can also look into platforms like Swell Investing and OpenInvest or work with a fund manager to screen for and divest from investments in the weapons industry, fossil fuels, etc. I also invest a portion of my savings with RSF Social Finance through a social investment fund note. The returns are small and fixed — but at 1.25% they’re greater than what you’d make if the money was in a savings account, and it’s comparable from a liquidity standpoint, and you get the opportunity to directly invest in social enterprises that are making an impact on issues you care about. If you’re a millennial with sizable wealth, you can even go a step further: Millennial-led organizations like the left-leaning Resource Generation are committed to investing in the equitable distribution of wealth and power. And finally, am I spending money on ethical consumption or am I contributing to our impending ecological crisis? Do I have a giving strategy that is proportionate to the amount of money I save?

I still have a long way to go, but asking myself these questions along the way helps me recenter and refocus my priorities. The most important work of our time, is building a new economy that is based on entirely different fundamentals than our current extractive economy, and it’s heartening to know and work with so many of my fellow millennials who are leading the charge.

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Nikishka Iyengar, a systems entrepreneur working at the intersection of finance, climate action and racial justice. She is the founder and CEO of The Guild, an organization focused on building community wealth through equitable and entrepreneurship. She is also the owner of Whole Systems Collective, an impact consulting collective working towards a just and regenerative economy through two key initiatives – the transformation of our financial systems, and climate action through carbon drawdown and responsible stewardship of our natural resources. Previously, as a sustainability consultant at a top management consulting firm, she helped her clients unlock ~$1B worth of value from renewable energy, water stewardship, and emissions reduction opportunities. Then, as a product manager at a waste tech startup, Nikishka built software (including artificial intelligence products) to allow companies to uncover waste diversion opportunities within their supply chain and operations.

Nikishka was recognized by GreenBiz as a “30 under 30” emerging leader in sustainability. She has a BBA in Finance, a BA in Economics and an Interdisciplinary Certificate in International Development from The University of Texas at Austin.

The Georgia Social Impact Collaborative (GSIC) provides resources to connect, educate and inspire stakeholders for the purpose of accelerating the development of Georgia’s impact investing ecosystem. Recently, GSIC announced the launch of the Georgia Social Impact Map (the “Map”), an interactive platform designed to connect and educate stakeholders interested in accelerating impact investing for social outcomes. Intended as a resource for communities around the state, the Map connects new forms of capital to sustaining and scaling solutions to social challenges. GSIC also provides workshops and programming for training specific groups of stakeholders on ways to leverage impact investing to achieve their impact goals, such as the workshop described below, which was attended by 30 leaders of some of GA’s top social enterprises and nonprofits.

December 7, 2018

By: Ted Kietzman 19MBA and Janvi Pamnani 21BBA, Emory University’s Goizueta Business School

Impact investing is a growing trend in the world of social impact and entrepreneurship. Traditionally, social enterprises were formalized as nonprofit entities and competed for grant funding from government and philanthropic foundations. However, in the past decade or so, financial support of impact has evolved. Mission-oriented organizations that earn revenue for their services now seek capital from investors looking for a combined fiscal and impact return on their investment.

This trend is found on the Emory campus in the form of the Emory Impact Investing Group and the Goizueta Impact Investors. The former (EIIG) is comprised of BBA students who invest debt capital in microbusinesses, often from Emory’s own Start:ME accelerator. GII is the MBA complement to EIIG and invests larger amounts of capital in social enterprises throughout Georgia.

In order to support the work of both student groups, the Social Enterprise at Goizueta (the school’s social enterprise center) sent us to the premier Impact Investing conference in the world—SOCAP.

SOCAP brings together representatives from non-profit, banking and academic sectors to discuss points of intersection. The conference is structured “festival style,” meaning at any given point there are several expert panels going on. Themes or “tracks” structure the conference for attendees interested in specific topics. While impact investing is always at the core of SOCAP, this year’s conference also had emphasis on themes such as “Gender + Markets” and “Blockchain for Impact.” Just as informative as panels, however, are the opportunities to network with people in the impact investing space. SOCAP itself hosts these events at the venue, the Fort Mason Center for the Arts, but organizations in the San Francisco area will also host happy hours for SOCAP attendees. As students, we soaked up as much as we could at both panel sessions and extracurricular events.

To be honest, the conference experience was a bit overwhelming. Fort Mason, San Francisco, a repurposed infantry base, became a haven for thousands of social entrepreneurs, impact investors, and intermediary entities like accelerators or government officials. In order to get some introductory information and hopefully influence the rest of the trip, one of the first panels we attended was Impact Investing: A State of the Field, a fireside chat-style session hosted by Fran Seagall, the executive director of the U.S. Impact Investing Alliance.

The panel ended up being a perfect start to the conference because it functioned as an overview of impact investing in the United States and the current trends throughout the industry. One interesting trend she noted was the increasing democratization of impact investing. In impact investing’s nascent stage, the financial instrument was only available to creative, and ambitious, traditional investors with lots of capital. However, in the past year or so, institutions like PAX World Funds and Calvert Impact Capital have opened gender- or community-based investment funds to consumers who want to invest small amounts of capital impactfully. However, Seagall also noted the negative trend towards “impact washing.” Impact washing is the act of manipulating data or results to show a promised social return, or even outright fabrication of impact.

Though the panels provided a wonderful amount of content and experience, it was not the only slated activity for us. On Tuesday evening, the Goizueta team headed to the Autodesk headquarters for a happy hour where we met some leaders in the impact investing space. One group that stuck out to us as student impact investors was Access Ventures, a team based in Louisville, Kentucky, that invests in local businesses. For Access Ventures, the missions of its investees matter just as much as financial fit. As leaders of EIIG and GII, groups that support impactful businesses in the Atlanta community on a volunteer basis, it’s awesome to know that there are people who do what we do full-time and sustainably.

On Thursday evening, we were treated to dinner at Besharam, a restaurant that was born out of the La Cocina network. The restaurant had incredible food and a good atmosphere, but also gave us the chance to experience the success of a food accelerator model. La Cocina provides affordable commercial kitchen space, industry-specific technical assistance and access to market opportunities for marginalized chefs. EIIG has worked with several food-based businesses, so it was wonderful to see the fruits of mentorship and support in the restaurant industry outside Atlanta. The leaders at the Social Enterprise Center will keep in contact with the team at La Cocina, hopefully bringing insights from La Cocina’s success back to Atlanta.

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Business education has been an integral part of Emory University’s identity since 1919. That kind of longevity and significance does not come without a culture built on success and service. Emory University’s Goizueta Business School offers a unique, community-oriented environment paired with the academic prestige of a major research institution with global reach. The hallmark of the Goizueta experience is learning in a tight-knit, intimate community where every student, faculty member, and administrator knows each other by first name. The school trains business leaders of today and tomorrow with an Undergraduate degree program, a Two-Year Full-Time MBA, a One-Year MBA, an Evening MBA, two formats of an Executive MBA, a Master’s of Business Analytics, a Doctoral degree and a portfolio of non-degree Emory Executive Education courses. Together, the Goizueta Community strives to solve the world’s most pressing business problems. The school is named for the late Roberto C. Goizueta, former Chairman and CEO of The Coca-Cola Company.

The Georgia Social Impact Collaborative (GSIC) provides resources to connect, educate and inspire stakeholders for the purpose of accelerating the development of Georgia’s impact investing ecosystem. Recently, GSIC announced the launch of the Georgia Social Impact Map (the “Map”), an interactive platform designed to connect and educate stakeholders interested in accelerating impact investing for social outcomes. Intended as a resource for communities around the state, the Map connects new forms of capital to sustaining and scaling solutions to social challenges. GSIC also provides workshops and programming for training specific groups of stakeholders on ways to leverage impact investing to achieve their impact goals, such as the workshop described below, which was attended by 30 leaders of some of GA’s top social enterprises and nonprofits.

SAN FRANCISCO- October 2018- I am the owner of a yoga studio called All Life is Yoga, and the Founder and Executive Director of the Dharma Project, an Atlanta-based non-profit that brings mindfulness and yoga to communities and organizations that experience high levels of stress and/or trauma. This includes public servants like police officers, first responders, teachers, and leaders in government and the nonprofit sector.

Since our launch in 2016, The Dharma Project has had the privilege of partnering with many organizations, including At-Promise Center, Atlanta Public Schools, Community Foundation of Greater Atlanta, Greening Youth…the Dharma Project has launched programs to serve police officers from 3 precincts in Atlanta and over 20 teachers across the metro Atlanta area. The Dharma Project was selected as a winner of the United Way of Greater Atlanta’s SPARK Prize and Rutu was named “Best Yoga Teacher in Atlanta” by Creative Loafing, was awarded the 2016 Civic Innovation Fellowship through the Center for Civic Innovation (with support from the Community Foundation), and received an investment from SPANX founder Sara Blakely for her work.

Most recently, the Dharma Project received a Social Impact Loan from Invest Atlanta and Spanx. This zero interest loan has supported our ability to create organizational stability and increase capacity by hiring a Director of Operations.

Just last month, I had the opportunity to attend the Social Capital Markets (SOCAP) Conference in San Francisco, the world’s largest annual convening of impact investors and social entrepreneurs. As a guest of the Community Foundation and its GoATL impact investment fund, I joined a group of other Atlanta leaders (including several founders of the Georgia Social Impact Collaborative) to learn about the latest trends is social innovation and impact investing. Being at SOCAP was so inspiring and I’m grateful for the Community Foundation for offering me this opportunity. The vitality and urgency of impact investing made it, at times, feel like a movement. There were financial institutions, venture capitalists, nonprofits, educators, foundations, consulting firms, those in agriculture business, those fighting for indigenous people’s justice, etc.—I was surrounded by change-makers and those that want to invest in them! It’s difficult to receive loans for social good, so hearing stories of how ROI’s are framed was enlightening. What is the economic value of justice, human rights, democracy? I enjoyed learning from those that are doing the hard work on how they used investments to build stronger organizations and increase impact and from investors on what they’re investing in and why.

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Rutu Chaudhari is the Founder and Executive Director of The Dharma Project, which provides self-care practices to public service organizations and the communities they serve. Learn more about The Dharma Project at https://www.thedharmaproject.org/. 

The Georgia Social Impact Collaborative (GSIC) provides resources to connect, educate and inspire stakeholders for the purpose of accelerating the development of Georgia’s impact investing ecosystem. Recently, GSIC announced the launch of the Georgia Social Impact Map (the “Map”), an interactive platform designed to connect and educate stakeholders interested in accelerating impact investing for social outcomes. Intended as a resource for communities around the state, the Map connects new forms of capital to sustaining and scaling solutions to social challenges. GSIC also provides workshops and programming for training specific groups of stakeholders on ways to leverage impact investing to achieve their impact goals, such as the workshop described below, which was attended by 30 leaders of some of GA’s top social enterprises and nonprofits.