What I’ve Learned About Impact Investing in 7 Years

I’ve written several books over the course of my career in the areas where I am both passionate and where I believe my expertise can add to an important dialogue – from eating disorders and body image to lessons from our urban revitalization efforts in West Philadelphia when I was President of the University of Pennsylvania.

Each book is special to me, and “The Power of Impact Investing: Putting Markets to Work for Profit and Global Good,” the book I coauthored with my friend and former colleague, Margot Brandenburg, is no exception.

In fact, today’s release of “The Power of Impact Investing” sends an extra shiver down my spine. Seven years ago, impact investing – investing with the intent for both financial return and social or environmental impact – wasn’t even a working phrase in any language, much less the vibrant ecosystem it is today. That’s not to say impact investing was imagined out of thin air. Indeed, impact investing has grown out of a number of successful movements, such as community-development finance in the United States and microfinance in the developing world, and was the product of coalescing forces, from the recognition by businesses of the value of producing a double-bottom line, to the appetite of Millennials, and some of their parents, who were charting a new path of aligning their investments with their values.

And so in 2007, philanthropists and entrepreneurs saw an opportunity to leverage these forces to open up private capital markets for public good. Questions abounded – could impact investing really work as a viable option for investors? Could it produce enough financial return to be a viable investment option? Was there too much risk? Would people want to do this?

But the possibilities greatly outweighed any doubts. And we at the Rockefeller Foundation, including my co-author Margot who helped lead the Foundation’s impact investing work, believed deeply that investors, if given the tools and the opportunity, would jump at the chance to make a difference with their investments. But we needed to build the infrastructure first.

And so for the last seven years, the Rockefeller Foundation has invested more than $40 million into creating the networks, the measurement systems, and the policy research to do just that. We incubated the Global Impact Investing Network, which has led the charge to increase the scale and the effectiveness of impact investing, around the world. We helped architect the Global Impact Investing Rating System and IRIS, a set of performance metrics standards, which has helped investors measure the social and environmental performance of their investments. And we’re now working on the demand-side, as well, to ensure enterprises that produce social and/or environmental and financial returns are able to absorb the growing amount of capital that is moving into these markets.

We couldn’t have imagined seven years ago that impact investing would become so big, so fast. That the time has come to write a book of this nature – this is why I’m so excited for today’s book release. Because we now can provide clear evidence, including scores of examples and inspiring stories that show impact investing is not just a good idea, but one that will continue to yield results for investors, social entrepreneurs, and their beneficiaries around the world. This book is a testament to that progress, and to an entire set of global actors who have made that success possible.

Simply put: my pride in this e-book is directly linked to my pride in what impact investing has become. (And it doesn’t hurt that my son is impressed that I’ve made the transition not just to reading electronically, but publishing there as well.) It’s allowed us to tell the stories of inspiring, regular individuals who are combining their investments with their values, like Ellen Nonneman, an active philanthropist committed to alleviating poverty in her hometown of Cleveland. Ellen discovered the Evergreen Cooperatives, a set of work-owned green cooperatives seeded by the Cleveland Foundation and other local donors. Ellen made a loan to its latest company, Green City Growers, a large hydroponic greenhouse designed to be the region’s largest lettuce provider. She visits regularly to monitor the progress the company is making, and has been able to modify the terms of her loan to meet her objectives.

Ellen is just one of many stories we are proud to tell. And of course, the story of impact investing is still unfolding – but our editors wouldn’t let us leave the book unfinished. As impact investing moves further into the mainstream, I know I’m not alone in looking forward to the next chapter.

Read the introduction below: