INCREASING THE FLOW OF CAPITAL FOR GOOD - INVESTING AND GIVING
Iapproached impact investment from the perspective of a grant-giving philanthropist at the Golden Bottle Trust, which is the C. Hoare & Co charitable foundation. Whilst we had succeeded in making some systemic and catalytic grants, I felt that many grants were not achieving very much.
In 2010, the trustees empowered me to make social investments of up to 10 per cent of the endowment, and quite quickly afterwards they were encouraged enough to raise the limit to 20 per cent. The first investment was in equity, the second was in the pioneering Peterborough Prison Social
Impact Bond, and then I found that at that time it was possible to earn 5 per cent on debt (loans to charities) whereas the bank was paying little or
nothing on deposits, so we invested in some debt instruments (including a microfinance fund). Within a few years, we had our first clear lesson:
this was not a part-time activity but required both in-depth investment and impact measurement expertise. This finding prompted us, in 2015, to join up with another non-profit, Panahpur, which had committed to invest 100 per cent of its endowment into impact solutions. Together, we hired the
professional team we needed to expand what we were doing, and to deliver our big ambitions to encourage others to invest in this way — and
created Snowball. We were quickly joined by Friends Provident Foundation, Skagen Conscience Capital, Gower Street, and the Ian Taylor Foundation, who all wanted to align their assets with their missions. At the time, these partners had to take all investment decisions as the partnership
was unregulated. TACKLING THE SDGS We built an investment portfolio whose capital contributed to tackling all 17 United Nation’s Sustainable Development Goals (SDGs) intentionally and additionally. These goals will never be met with just philanthropic and taxpayer’s money — it was and still is important to mobilise mainstream investment markets. We wanted to keep the impact themes broad, and to demonstrate that it is possible to achieve competitive returns and measurable impact. The portfolio used cash and fixed income, public equities and private equities, and some venture
finance. Importantly, the fund was designed to be evergreen (which is to say that we do not have to liquidate investments and wind up the fund at any
particular time). We were early members of the Impact Measurement Project — we adopted their methodology in order to contribute to a coalescing
of standards, but we also added to their thinking in the way it can be applied in a multi-manager or “fund of funds” context. Part of this work involved
designing an impact framework, and a simple visual to display the impact score of portfolio holdings and of the portfolio as a whole. This is our
“bullseye”. We later won two awards for the impact management methodology we developed (Pensions for Purpose, 2019, Impact Strategy Award and Most Read Content for the first report we published on it).