How many times have you been to an impact investing conference and wondered why nonprofits, the sector whose entire focus is to drive impact, are not in the conversation? The reason is that there aren’t many vehicles that allow nonprofits to access impact investment capital.
In May 2021, 7 nonprofits driving upwards economic mobility for underserved populations in the Bay Area and Colorado have successfully secured ~$8M in impact investment capital from 34 individuals, foundations and institutions through a novel performance-based financial product, the Impact Security, developed by NPX.
The Impact Security allows a nonprofit to raise both donations and investments (seeking financial return) and explicitly links funding to the organization’s performance.
The nonprofits repay the Impact Security over time with funding from their respective Donor Impact Funds, results-based outcomes funds pre-raised from private donors who want to drive outcomes in economic mobility.
There are a few reasons this milestone is so important:
- Proves that funders want to invest in nonprofits with returns explicitly linked to impact
- Diversity of investors — the 34 investors represent:
- 40% individuals
- 24% from donor-advised funds
- 15% making direct investments
- 25% investment funds
- 36% private foundations
- 40% individuals
Join us to hear why a well-known pay-for-success funder, a forward-thinking community foundation and a prominent private wealth firm decided to invest in these first-time deals and why nonprofits want to be funded through this type of vehicle.
