Part Two: the blended value asset class

Is claiming its place on the capital map

© 2007 all rights reserved

investment | philanthropy > spectrum of investing > overview

Investing and giving no longer binaryInvesting and giving no longer binary

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing > overview

Instead, a specrum has evolvedInstead, a specrum has evolved

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing

investmentinvestment philanthropyphilanthropyblended valueblended value

Do you seek market rate

returns?

Do you sacrifice all your capital for

positive impact?Do you sacrifice some return for positive impact?

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

You ask three questions, not just two, because it’s a spectrum

investment | philanthropy > spectrum of investing

Strategic Philanthropy

Socially Screened

Funds

Community Investment

Socially Targeted Market Rate

Funds

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing

Strategic Philanthropy

Socially Screened

Funds

Community Investment

Socially Targeted Market Rate

Funds

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

•Calvert• Domini• Access Capital• Generation

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing

Strategic Philanthropy

Socially Screened

Funds

Community Investment

Socially Targeted Market Rate

Funds

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

• Blue Orchard Microfinance• Community Reinvestment Fund• Deutsche Eye Fund

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing

Strategic Philanthropy

Socially Screened

Funds

Community Investment

Socially Targeted Market Rate

Funds

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

• Pacific Community Ventures• CEI (Maine, VT, NH)• CDVCA• Investors’ Circle

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

investment | philanthropy > spectrum of investing

Strategic Philanthropy

Socially Screened

Funds

Community Investment

Socially Targeted Market Rate

Funds

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

• Calvert Foundation• Good Capital• Nonprofit Finance Fund• RSF Social Finance• Oasis (Blue Orchard)

© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

Strategic Philanthropy

Socially Screened

Funds

Community and SE

Investment

Socially Targeted Market Rate Instruments

Social & Community Development

Venture Capital

market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit

• REDF• Social Venture Partners• New Profit Inc.

Acumen,Newschools

The new space we fill…

Risk/Return

Purpose

Why they don’t

plug the gap

TraditionalCapital Market

Market rate risk/ return

Maximizefinancial return

No interest in social impact or the cost of doing good

Donors -Grants

HI RiskNo Return (tax break)

Maximize social return

Limited scale

Often lacks business case

Debt(NonProfit, ComDev,

most PRIs)

Med/Low RiskLow Return

Demands collateral, lower risk profile doesn’t fund expansion

Expansion Equity and Equity-like

Med/High RiskMed/Low Return

Balances SROI within traditional business ROI for expansion

Fills the growth gap, its what we are creating

CDVCs/ SVCs

High RiskMed/High Return

Maximize financial return within social or community development context

No appetite for the cost of doing good

Fiduciary responsibility to get a market rate return

Social Return Financial Return

Balances SROI within business traditional ROI

e.g. Banks and Private Equity

Foundations Calvert Foundation Partners for a Common Good NP Finance Fund

Pac Com Ventures SJF Ventures Investors Circle

Some Venture Philanthropy and Foundations nibble around the edges, no inst.

Filling the growth gap

For funding the expansion of proven social enterprises….

Opportunity Solution Why GC Execution

…creating the need for a new asset class that: understands the risks and benefits of doing good, invests in great social entrepreneurs, and creates the inspiration and motivation for others to think big, achieve more

CommercialDebt

Grants

Infr

as

tru

ctu

re

Capital

SocialAngels

SocialVC

“PRI”Debt

PublicMarket SRI

LandscapeDefinition

Evaluation/Certification

Transactional(e.g. Funds)

ExchangePlatform

AA1000

GRI

RSF Social Finance

NFF Capital

Partners

Investors’Circle

Aspen Institute

Domini SocialInvestments

Underdog

Chicago ClimateExchange

SouthShore Bank

Calvert Special Equities - CF CI Notes - Calvert Mutual Funds

New Schools

BOVESPASocial

Stock Exchange

Origo

NFFLendingAcumen Fund Generation

Investments

GenerationFoundation

Ashoka

Deutsche Eye Fund

© Jay Coen Gilbert, Don Shaffer and John Katovich

The infrastructure for the Social Capital Market is emerging

CommercialDebt

Grants

Infr

as

tru

ctu

re

Capital

SocialAngels

SocialVC

“PRI”Debt

PublicMarket SRI

LandscapeDefinition

Evaluation/Certification

Transactional(e.g. Funds)

ExchangePlatform

CalvertPhilanthropicAssets/DAF

AA1000

GRI

RSF Social Finance

Local Exchange

NFF Capital

Partners

Investors’Circle

Aspen Institute

Domini SocialInvestments

Underdog

Chicago ClimateExchange

B Lab

Good Capital

SouthShore Bank

Calvert Special Equities - CF CI Notes - Calvert Mutual Funds

New Schools

Xigi.net

BOVESPASocial

Stock Exchange

UK SocialStock Exchange

Fourth Sector Network

Origo

NFFLendingAcumen Fund

Patient CapitalCollaborative Generation

Investments

GenerationFoundation

Ashoka

Deutsche Eye Fund

© Jay Coen Gilbert, Don Shaffer and John Katovich

More intermediaries a sign of new money in the Blended Value Market

investment | philanthropy

New capital with new powerto make change

• Working Today• Evergreen Lodge• Real Benefits• The-hub.net• Pura Vida• Women’s Bean Project• The Benefit Bank

good capital > where

Social enterprises ready to grow

accelerating the flow of capital to good

Goodcap.net

GoodCap’s xigi map:http://www.xigi.net/index.php?en=338

Graphic conceptualizations © Mark Beam, Collective Intelligence 2007

Impact graphic © Aquillian Investments LLC