Impact Investing

The Council is participating in the conversation about unlocking new capital for social good. For decades, some foundations have made impact investments that intend to generate financial and social returns to complement grants, partnerships, advocacy, and other tools in the philanthropic toolbox. Increasingly, individuals, foundations, and other institutions are interested in making impact investments that break down the barriers between social and economic value creation.

What is impact investing?

We define impact investing as any investment activity that intends to generate positive social and financial returns. Whether called impact investing, mission investing, social investing, social-impact investing, mission-related investing, program-related investing, or sustainable and responsible investing, the practice focuses on activating new financial resources to solve social and environmental problems.

Visit our Getting Started Resources to learn more about the basics of impact investing.

How is the Council involved?

The Council is working to help our members fulfill their missions by taking part in conversations among foundations and investors about impact investing. As a connector, the Council is:

Engaging policymakers to promote a supporting regulatory environment. The Council's Public Policy and Legal Affairs team has made it a priority to seek guidance from regulators and to make that guidance accessible to our members. Some recent policy initiatives include:
- IRS Guidance on Mission-Related Investments: Long a priority of the Council and our partners like Mission Investors Exchange and Council of Michigan Foundations, the IRS recently released guidance pertaining to private foundation impact investing. To learn about this important development, you can view our webinar on the subject.
Organizing provocative conversations among foundations and other partners. Along with the Center for American Progress, we co-hosted conversations among foundations, community development financial institutions, and investment firms about social impact bonds and Pay for Success. Out of these conversations, two issue briefs were created:
- “Networking for Success: Building Networks Is Essential to Investment in Social Impact Bonds”
- “Investing for Success: Policy Questions Raised by Social Investors”
Aggregating resources to demystify the process. Working closely with Mission Investors Exchange, The Greater Cincinnati Foundation, The Vermont Community Foundation, and a working group of impact investing leaders, we released the Community Foundation Field Guide to Impact Investing.