Welcome to our guide to social finance and impact investing. This is a dynamic and rapidly evolving space that encompasses a wide-range of social issues and sectors. The purpose of this guide is to collect and summarize the most relevant resources to introduce anyone to the space. By reading this guide you will:
Our aim is that students and professionals alike will derive value from these insights!
Before diving into the guide, let’s define a few concepts that you may have or will come across as you access a variety of resources available to you.
IMPACT INVESTING
Grouped under the umbrella of “social finance”, impact investing comprises investments intended to create positive impact beyond financial returns (coined in 2007 by the Rockefeller Foundation). While this definition leaves room for a broad set of investments, two key elements should be present: intentionality and measurement.
GLOBAL IMPACT INVESTING NETWORK (GIIN)
A network of impact investing professionals advancing the industry and offering information and resources to investors.
ESG
Environmental, Social and Governance (ESG) factors are aspects that impact investors may consider as part of their investment analysis as a way to evaluate whether their investments promote sustainable, fair and effective practices and mitigate potential risks.
MISSION-RELATED INVESTMENTS
Risk-adjusted, market-rate investments made as part of a foundation’s endowment and have a positive social impact while contributing to the foundation’s long-term financial stability and growth.
PROGRAM-RELATED INVESTMENTS (PRIs)
IRS-defined below-market rate investments made by private foundations designed to achieve specific program objectives. PRIs have a legal definition in the US (as opposed to MRIs) and count as a qualified distribution towards a foundation’s 5% annual payout requirement
understanding.
INVESTMENT SCHEDULE
The structure of the transfer of money itself can incorporate cash, private and public debt or equity, real assets, or other innovative instruments, such as pay-for-success contracts.
PAY-FOR-SUCCESS CONTRACTS
A contract that allows the public sector to commission social programs and only pay for them if the programs are successful.
In 2017, the Government of Canada created the Social Innovation & Social Finance Strategy Co-Creation Steering Group. The group provided 12 recommendations to advance social innovation and mobilize social finance in Canada. In November 2018, the Fall Economic Statement from the federal government outlined a proposed $755M Social Finance Fund to invest into socially innovative projects.
Funded by Government of Canada, the UBC Sauder Centre for Social Innovation & Impact Investing (SauderS3i) identified 23 case studies of social innovation in action across Canada. These case studies represent innovative and new ways of tackling challenges faced by Canada. Ranging from projects providing new platforms to finance clean energy projects in Ontario to cafés hiring individuals with barriers to employment in British Columbia, these case studies represent how social innovation can be applied to solve the social and environmental issues as well as the role finance has played in catalyzing these solutions.
Jenn Pryce, President & CEO of Calvert Impact Capital
“There’s many paths to your dream job. Focus on building skills in the functional area that interests you.”
Upkar Arora, CEO of Rally Assets
“There’s no formal path to leadership in impact investing so understand the market, do your homework, network and get outside your comfort zone.”
Adam Jagelewski, Lead Executive of Impact Investing at MaRS
“Be aware of your resources. There is no shortage of impact needs, and a robust set of financial tools exist.”
Mallory Greene, Head of Corporate Social Responsibility at Wealthsimple
“Try different experiences and opportunities to determine what you really love doing.”
Cheryl Dorsey, President at Echoing Green
“Understand who you are and the impact you are meant to have on the world. Be aware of opportunities, embrace change and even failure.”
Jay-Ann Gilfoy, CEO of Vancity Community Investment Bank
“Take on challenging assignments and don’t try to do it alone.”
Rodney Ghali, Assistant Secretary to the Cabinet, Impact and Innovation Unit at Privy Council Office
“Be a good listener, partner and be someone who never gives up.”
This wonderful guide created by Net Impact takes aspiring professionals through different steps to enter the impact investing field:
As you navigate the space, you will encounter different roles. The most common for students out of undergraduate programs will be analysts and you can work your way up to Manager and Director positions. This will be mostly true for financial services, however, if you end up working in other areas of the business (marketing, HR, tech) these will be different. The following link contains some descriptions of the roles you may encounter in the financial services space.
We hope you’ll continue learning about this space on your own, with friends and school. Check out these additional resources below to help guide you:
Impact Investing: An Introduction
Impact investing: A guide to this dynamic market
A Short Guide to Impact Investing
Social Venture Impact Investing: The Canadian Landscape
The Individual Imperative: Retail Impact Investing Uncovered
Roles Foundations Play in Shaping Impact Investing
Impact Investing 2.0: The Way Forward – Insight From 12 Outstanding Funds
