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SOCAP17 Guest Curator Spotlight: Mission Investors Exchange on Foundations as Drivers of Change

SOCAP August 11, 2017

We will introduce a new content series at SOCAP17. Five Guest Curators, all leaders in the impact space, are now developing their own SOCAP Spotlight sessions. Each Spotlight will dive deep into a key concept within impact. Guest Curator Mission Investors Exchange will present Spotlight sessions focusing on foundations and impact. Mission Investors Exchange is the leading network of foundations engaged in impact investing. We recently sat down with Matt Onek, CEO of Mission Investors Exchange to discuss their upcoming Spotlight Sessions at SOCAP17:

Mission Investors Exchange’s Core Inquiry:

Mission Possible: How are foundations innovating and partnering across sectors to drive more capital to real impact?

SOCAP: What are some of the core concepts you plan to explore through your Spotlight sessions at SOCAP17?

Matt Onek: We are thrilled to be at SOCAP this year. We are coming to help amplify a unique voice: Foundations. Mission Investors Exchange is the leading impact investing network for foundations dedicated to deploying capital for social and environmental change. When SOCAP talks about a vision to bring together money and meaning, that’s our sweet spot–it’s what foundations have been doing since their inception.
Today’s foundations are playing a unique leadership role in the impact investing sector. They are driving innovation, catalyzing new partnerships, and ensuring there is a real focus on impact. These are three of the core concepts we plan to explore in our sessions.
It may come as a surprise to many attendees to learn that it is foundations and not private sector investors or advisory firms that are developing many of the most innovative investment models in the impact investing space. Foundations have the more flexible, risk tolerant, and patient capital that can de-risk individual transactions–and even whole markets. That’s very powerful.
Take the Bill & Melinda Gates Foundation for example, a Mission Investors Exchange member. Gates is increasingly making direct equity investments in early stage drug companies to help accelerate cures for diseases that disproportionately affect the world’s poor and to make it more efficient to deliver remedies to the bottom of the pyramid in developing countries. This investment capital is filling a gap and really shows the catalytic role foundations can play.
In another example, our member the McKnight Foundation wanted more investment choices in the public markets that matched its climate mission. It worked with Mellon Capital to create a new carbon efficiency strategy that enables investors to support companies that are reducing carbon emissions. When McKnight couldn’t find this kind of fund on the marketplace, one that allowed them to invest according to their mission, they helped create one.
These examples also highlight the second core concept which is how foundations are breaking down silos and building cross sector partnerships. Today’s global problems are far too complicated and too big for any one sector to tackle. And keep in mind that foundation resources, while substantial, are limited to just a fraction of the capital markets. So, to achieve real impact, it is critical to collaborate and to leverage the public and private sectors that can bring the resources necessary to scale innovative social enterprises and business models.

What are some of the other primary challenges you hope to address?

Matt Onek: One of our main goals at Mission Investors Exchange is to ensure that we keep the ‘impact’ in impact investing. The field is obviously exploding and that excites us. As more entrants come aboard, we think foundations are critical to maintaining a laser focus on impact. The question of how to address this issue is certainly one of the challenges facing the field as it grows.

Why is this a critical conversation the SOCAP Community should be having now?

Matt Onek: It is critical now because the impact investing field is rapidly expanding. There are new entrants every day from all different kinds of sectors including new foundations, new institutional investors, and new private banks. That’s great- we need more actors, we need more capital.
We think the role of foundations is particularly important as the field grows to ensure that we keep a focus on obtaining real social and environmental returns. I think there are many reasons why foundations are uniquely positioned to ensure this focus on impact starting with mission as their reason for being. We want to raise awareness of that within the SOCAP community and highlight opportunities to leverage this philanthropic capital.

How has your organization’s work shaped your perspective on this theme?

Matt Onek: Mission Investors Exchange and its predecessor organizations have been around for nearly 15 years, well before the term impact investing was coined. We were created by, and continue to be led by, the foundation pioneers in the space. These foundations were seeking to use more than traditional grants to get to impact. So impact has always been our central focus.
We work with both newcomers to the field and the most advanced investors, and we actively partner with investors across the entire ecosystem, whether that be public or private sector. Our goal is to make the connections and build the networks that allow for these different types of investors to come together and drive more capital to social and environmental good.

What is inspiring you most as you work to develop these sessions?

Matt Onek: I think what is inspiring us most are the foundations that are stepping up and taking bold steps to utilize impact investing to drive social and environmental change. We are seeing that foundations of any size can use a range of different approaches to drive change. They are doing this across nearly every social impact sector from traditional commitments to affordable housing and community development to investments in climate change and reproductive health, so really a broad spectrum.
There have been several notable announcements of late that have been particularly inspiring, including the Ford Foundation’s $1 Billion commitment to investing for mission out of their endowment. And Heron Foundation reaching the 100% investment mark, where all of their assets are now invested for mission. There are obviously many smaller family and community foundations taking equally bold steps and I think it is just inspiring to see that amount of activity in the philanthropic space now.

What do you hope SOCAP attendees will bring with them when they come to your sessions?

Matt Onek: We hope attendees will come with an openness to seeing the boldness of 21st Century foundations. Some people still seem to believe that foundations are slow to come to this space and are conservative by nature. What we want is for them to understand that these are not your grandfather’s foundations anymore.
We want attendees to really explore how foundations’ catalytic capital can be used to help address the challenges that they are facing: how foundations can work with other investment partners, how entrepreneurs and fund managers can best access foundation capital, how other players at SOCAP can best utilize the range of advantages that foundations bring to these deals, which is the really patient, risk tolerant and flexible capital.

What do you hope attendees will take away from your SOCAP Spotlight sessions?

Matt Onek: First we really hope to educate and inspire attendees about the critical role foundations are playing and how they can partner with foundations to drive the social and environmental change they too are working toward.
Second, we want them to forge real connections with different types of investors. Hopefully they can find a new partner, a new investor in their social enterprise, or a co-investor in their next deal.
Most importantly, we hope this serves as a call to action and instills attendees with a sense of urgency. By walking away with a better grasp of the investor-investee relationship and more examples of innovative deals that are getting done, we hope investees and investors will ask themselves What am I waiting for? or Why aren’t I doing more?

What progress do you hope to see in this area within the next 10 years?

To borrow a line from Heron Foundation President Clara Miller, we hope that in 10 years all investing is impact investing and that social and environmental issues are baked into all investment decisions.
As this field grows, and it is going to grow exponentially, we hope there will remain a laser focus on impact, or what we often call deep impact on the most underserved individuals and communities in the United States and around the world. To get there it is important that we build greater infrastructure for the field, including how we measure impact and how we ensure that this deep impact is really being achieved.


Resources

Other Guest Curator Spotlights:

Additional guest curators are developing sessions that will debut on stage at SOCAP17 in October. We will share interviews with all of our guest curators in the lead up to the conference including:

Follow the SOCAP blog for sneak peeks into our guest curated sessions. Get your ticket to SOCAP17 to join in the conversation.

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