Friday, July 15, 2011

White House Provides Visibility to Impact Investing

Lisa Hall, the President and CEO of Calvert Foundation, was recently invited to speak on policy and regulatory implications for the Impact Investing industry at a convening hosted by the White House, along with Rob Wexler of Adler Colvin and Cathy Clark of the Center for Advancement of Social Entrepreneurship at Duke’s Fuqua School of Business.

Lisa Hall
As I walked through the entrance to the White House grounds a few weeks ago for a first-time convening on the "Building an Impact Economy in America," it took me back to more than a decade ago, when I worked as a staffer for Gene Sperling in the Clinton Administration. Back in 1999, I had the opportunity to travel with the President on Air Force One for what the press dubbed "The Poverty Tour," which the administration used to launch the New Markets Initiative, eventually resulting in legislation to spur investment in impoverished communities across the nation. 

We visited distressed communities in urban areas such as Watts in Los Angeles and low-income neighborhoods in rural areas such as the Mississippi Delta. As we drove into Appalachia on the first day of the four-day trip, I was struck by how many people had come out to see the President and Jesse Jackson, who gave a kick-off speech. The number of people who lined the streets was awe-inspiring and impressed upon me how hungry citizens were for support from the government, and how much they wanted tools in place that would help them get jobs, start businesses, and repair their communities.

This kind of visit wasn't typical of a U.S. President at the time. In fact, Clinton's visit to Appalachia was the first by a President since Lyndon Johnson declared his "War on Poverty" in 1965. The Poverty Tour was an attempt to make underserved communities visible - and it worked. The trip drew unprecedented media attention to low-income communities, receiving five consecutive days of coverage on the nightly news.

One of the many bright spots on that trip was a visit to a factory financed by Kentucky Highlands Investment Corporation, a certified Community Development Finance Institution that drives investor capital to social causes, creating jobs, funding education, and financing small businesses. Little did I know that a dozen years later I would be leading an innovative organization driving investment dollars from thousands of socially conscious individuals to hundreds of organizations like Kentucky Highlands around the country and the world. Kentucky Highlands is now a borrower of the Communities at Work Fund, a $200 million Citibank fund managed by Calvert Foundation’s wholly owned subsidiary Community Investment Partners. (I’m honored to serve as the Board Chair of Community Investment Partners.)

The visibility of the Poverty Tour has long faded into the background. Bill Shore, Executive Director of Share Our Strength, recently Tweeted about an article in last Sunday's New York Times titled "Somehow, the Unemployed Became Invisible." A recent nationwide survey conducted by HBS professor Michael I. Norton and Dan Ariely found that Americans “drastically underestimated the level of wealth inequality in the United States.” It's time to bring the spotlight back where it belongs. Norton is exploring whether educating Americans about this inequality will increase their support for better economic policies. There are many others who want to bring more attention to the needs of underserved communities and create avenues of opportunities for the people who live there. I have the privilege of working with them every day.

Which is why I was absolutely thrilled to be invited to the White House last month for a convening on "Building an Impact Economy in America” (watch the video clip here). The Aspen Institute, which co-sponsored the convening, defines the Impact Economy as the supply of capital and those firms demanding the capital in pursuit of both profit and social impact. The Administration wants to build a policy agenda that will drive investment in American businesses and also generate financial and social returns. This event brought together many of the people I am privileged to work with, such as: Ron Phillips of Coastal Enterprises, a long-time Calvert Foundation borrower; Debra Schwartz of the MacArthur Foundation, one of our earliest grant supporters and a true believer in the vision; and Bob Annibale of Citi, who has used his influence within a large corporation to drive investment dollars and attention to both domestic work like the Communities at Work Fund and microfinance initiatives internationally. My former boss Gene Sperling, now President Obama’s top economic adviser, was also at the event and spoke eloquently about the administration’s efforts to rebuild the economy and create jobs for Americans. 

The White House has recognized the power and efficacy of investing for both financial and social return. Those attending the convening were there to advise the government about how to “remove barriers, streamline regulations and target existing government resources to support the building of an impact economy.” At its core, the event was about creating prosperity and alleviating economic suffering throughout the country. I believe that just as Johnson did in 1965 with his Great Society and Clinton did in 1999 with his New Markets Initiative, President Obama has the opportunity to use the power and influence of his office to bring more attention to underserved and low-income communities which have been disproportionately affected by our current economic challenges. 

Jonathan Greenblatt of the Aspen Institute described the meeting as "historic"; he believes the "Impact Economy" will soon be a term “that is as well-known as microfinance or charter schools, a trend that overturns an old order, shakes loose ossified ideas and spawns social benefit scale as a result.” The meeting was an important first step toward establishing a national strategy for the impact economy. It is our hope that we can build on the momentum of this gathering and translate the conversations into tangible results for the impact investing industry, and the country, as a whole. 

Calvert Foundation’s vision of a world with "5% for impact" - where 5% of every investor’s portfolio is dedicated to impact investing – appears to be within reach. I look forward to continuing to engage with officials in the Administration about ideas for the future to help build an impact economy which can fuel an overall economic recovery that benefits all members of our society. Let’s all encourage the White House to host more convenings and continue bringing more attention to these issues, ultimately creating more government policies and programs that enable private, social impact investments in the most vulnerable communities in our nation. 

1 comment:

  1. What is the President going to do? See money saving tips around the home grocery store and the gas pump

    Ver consejos para ahorrar dinero en el hogar y
    en la bomba de gas