In order to fix some of the most pressing social problems we face, we need to expand our current capacity to invest private capital for public purposes. Impact investing is the deployment of capital with the intent of not only generating financial return, but also producing measurable social and environmental impacts.
Living Cities is an advocate and leader in the domestic impact investing field. Indeed, since 2008, our Catalyst Fund has made $35 million in below-market rate loans to finance innovative initiatives in areas including community development, transit-oriented development, energy efficiency retrofits, and access to fresh foods. Most recently, the Catalyst Fund has been one of the early lenders testing how developing Pay for Success models can address human capital issues such as juvenile recidivism. Since inception, our $35 million in loan capital has helped launch initiatives with total funding of almost $450 million from numerous public, private and philanthropic financing partners; and resulted in a leverage ratio of 13 times.
Yet, despite what we and other impact investors who are focused on the US market have been able to achieve, today, most potential impact investors, when imagining impact investment opportunities, think first of water filtration systems in Africa rather than a rail line in Detroit.
Our CEO Ben Hecht asked why this is, and what we can do about it, emphasizing that “we need a renewed commitment to catalyzing a greater domestic impact investment industry.”
Read Ben’s article in Forbes and let us know what you think in the comments section of this blog.