Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return (GIIN, 2011).
These investments can be considered as:
Mission-Related Investments (MRI): MRI's are financial investments made in either for- profit or non-profit enterprises with the intent of achieving mission-related objectives and normally earning market-rate financial returns. Financial instruments in this category include bonds and deposits, loans and mezzanine capital, public equity, private equity, and venture capital investments.
Program-Related Investments (PRI): PRI's are investments made to charities as well as for-profit and non-profit enterprises to further the Foundation’s program objectives, but – unlike grants – they also aim to generate financial returns, with a tolerance for below-market returns.
Building on the recommendations of the Social Finance Task Force, the Foundation expects to meet and exceed its 10% target of total assets invested in impact investments by 2020, and is currently targeting investments through intermediaries in the following sectors:
Today, the Foundation’s portfolio is made up of investments with diverse risk-return profiles (both on impact and financial dimensions), with expected return that range from inflation-adjusted repayment of principal to 20% IRR. The investments are directed to charities, non-profits, for-profit social ventures, for-profit start-ups and even corporations. While the investees vary, they all have something that is fundamental to the Foundation’s impact investing objectives; they are delivering impact on one or more levels of society and societal transformation.