You have been hearing the terms “impact investing” and “social enterprise” much more frequently in recent years, and this is one of the hottest issues in the nonprofit sector right now.
Impact investing—investments designed to produce both social benefits and financial returns—represents a dynamic way for nonprofits to further their mission while opening up funding opportunities from sources never before available. This trend has been fueled by opportunities to channel traditional investment capital into the nonprofit world. Facing potential funding cuts from federal, state, and local governments, as well as other challenges to traditional fundraising and sources of financial support, nonprofits are increasingly forced to diversify their revenue generation to achieve their goals.
But what does impact investing actually entail? In fact, a lot of different things—all under the “impact investing” heading. Some of it does not relate to nonprofit at all. But in this program, we will focus on the issues solely from the perspective of nonprofit organizations.
While most nonprofits have not even dipped their toe into the impact investing space, some have—including the organizations represented by our panelists—and we will discuss the wide range of cutting-edge activities being undertaken by some very innovative nonprofits. We also will discuss the ways in which a nonprofit taking on investors is a major step, one that can require a number of significant changes to the way your organization operates. But many forward-looking nonprofits have recognized that being committed to their mission does not mean having to be wedded to traditional business models.