Impact Investing 101







Full text


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Investment philosophies focused on social

impact have many names…

• Socially Responsible Investing

• Sustainable and Responsible Investing

• ESG (Environment, Social, Governance) Investing • Impact Investing

• Socially Conscious Investing

• Double or Triple Bottom Line Investing • Ethical Investing

• Mission-related Investing • Green Investing


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Investors interested in social AND financial

returns are numerous and diverse.


Banks and Credit Unions in low- and middle-income communities Foundations Religious Institutions

Venture Capitalists & Private Equity Investors

Pension Funds Colleges and Universities

Investment Management Firms Institutions

Money Managers


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The industry is growing rapidly, and expected

to continue on this path.

The total US-domiciled assets under management using socially responsible strategies

expanded from $3.74 trillion at the start of 2012


$6.57 trillion at the start of 2014, an increase of 76%.

These assets translate into

1 out of every 6 dollars

under professional management.


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The industry has three main segments:

Environmental, Social &

Governance (ESG) Integration

Impact Investing

Shareholder Engagement &


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ESG integration evaluates public companies on

factors that align with investor interests and

affect how a company is run and performs.

• Fund managers select publicly listed securities that have certain environmental, social and governance (ESG) attributes.

– Negative screens exclude objectionable business practices:

• Animal testing, tobacco production, poor environmental performance, military weapons productions, gambling, irresponsible foreign operations, terrorist regimes – Positive screens identify companies with admirable business practices:

• Environmentally friendly practices, healthy living and environmentally friendly products, workplace practices and diversity, animal rights

– Best-in-Class strategies identify companies in somewhat questionable industries (oil & gas) with ESG policies that are superior to their industry peers.


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Shareholder advocacy aims to improve the

social policies of public companies.

• Main goal:

• Shareholders encourages companies to adopt or improve their environmental, social and governance practices.

• Engage in direct dialogue with


• Issue shareholder resolutions

• Participate in proxy voting

• Deliver congressional testimony

• Attend annual shareholder


• Environment and climate change

• Corporate governance and ethics

• Corporate disclosures (ex.,

political contribution and executive pay)

• Diversity and women in the


• Human and labor rights

Sample Focus Areas Shareholder Activities


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The number of voices engaged in shareholder

advocacy is increasing.

• From 2012 to 2014, 175 institutional investors and 27 investment

management firms with total assets of $1.72 trillion filed or co-filed resolutions.


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Impact investing aims to improve

communities underserved by conventional

financial services.

• Impact investments are made:

– with the intent to deliver both social AND financial returns;

– in multiple asset classes and are often private investments; and

– into companies, organizations and funds often focused on low-income communities, in both developed and emerging markets.

The ultimate goal of community

investing is to enable a sustainable

solution to the world’s most pressing

social challenges by empowering people


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Defining characteristics of

impact investing:







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Community investing has grown rapidly due its

proven ability to benefit under-resourced


Source: US Social Investment Foundation, 2014 Trends Report

• A total of 880 community investing institutions, including community

development banks, credit unions, loan funds and venture capital funds, collectively manage $64.3 billion in assets.


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Community investing typically targets sectors

that have challenges attracting capital.


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Calvert Foundation’s Impact

“My interest and action lie in doing things where there’s a multiplier effect. I

know that my investments make an impact over and over, in communities where

people live and work everyday.”

-- Tim Wheeler, Durango, CO Small Business Owner and Investor since 1995


Affordable housing units financed


Microfinance customers served


Countries served


Jobs created or maintained

Over the past three years alone, our investors have enabled us to create the following impacts:


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Calvert Foundation focuses its investment

on specific issues areas:

• Calvert Foundation’s Community Investment Note investors can support:

– Affordable Housing – Education

– Small Business

– Women’s Empowerment & Clean Energy (WIN-WIN) – International Microfinance

– Fair Trade

– Ours to Own: Denver – Ours to Own: Twin Cities – Ours to Own National


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Impact: Affordable Housing

• Investment in the Affordable Housing initiative supports Calvert

Foundation's portfolio of organizations that develop affordable housing projects, which are critical to families’ economic and social wellbeing.

Real-life Impact:

AHC Inc. is a non-profit developer of affordable housing in the Mid-Atlantic region that provides quality homes for low- and moderate-income families. In an effort to offer educational services to strengthen residents’ economic and social stability. AHC Inc. holds a summer camp for its more than 100 low-income elementary students specifically designed to prevent learning loss. The

program is working – last year 93% of students showed no summer learning loss and 46% showed summer reading gains.


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Impact: Education

• Access to a quality education has been shown to be the most effective route to increasing lifelong earnings and escaping poverty. Investment helps finance the construction and growth of charter schools that

provide quality education, often in disadvantaged communities.

Real-life Impact:

Investment capital allowed the Camino Nuevo Charter Academy to transform an unused maintenance facility in Los Angeles into a thriving school that is achieving

academic success. Its students, whom reside in some of the most historically under-served areas of Central Los Angeles, have outscored the rest of the state of California on the Academic Performance Index (API), which

measures California schools based on how their students perform on the California Standards Tests (CST).


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Impact: Small Business

• Small businesses are a major employment engine of the U.S. economy and are essential to thriving local economies. Investment helps provide the working capital business owners need to grow, creating jobs and fulfilling critical needs in communities.

Real-life Impact:

Tri-State Restaurant Supply, a supplier of specialty kitchen and coffee supplies, was hit hard by the recession. When owner Jim Bliss learned he was not eligible for bank financing, he turned to Montana Community Development Corporation's (CDC) Small Business Development Center. The Center worked with Jim for over a year to overhaul his business and become eligible for financing from Montana CDC. Today, Tri-State Restaurant Supply employs 14 staff with offices in two cities and continues to serve the entire state of Montana.


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Impact: Women’s Empowerment

• Women Investing in Women Initiative (WIN-WIN) empowers women around the world to be agents of their own economic power and

opportunity. WIN-WIN supports organizations that empower women through access to financing, healthcare, housing, and education.

Real-life Impact:

Women Organizing Resources, Knowledge, and Services (WORKS) is creating safe affordable housing in at-risk neighborhoods in Los Angeles. WORKS transformed a gang and drug ridden area into Highland Village. The renovated housing development includes a Community Center that offers a variety of programs including ESL classes, after-school tutoring, and computer instruction at no cost to the residents and neighbors.


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Impact: International Microfinance

• Investment in the International Microfinance initiative will provide

entrepreneurs in developing countries the capital they need to start or expand microbusinesses, putting them on the path towards long-term economic progress.

Real-Life Story:

Fanira Mammadova took her first loan from WorldVision

Azerbaijan in 1999 to raise chickens. She later took out loans for animal husbandry and to set up a small shop. Thus far, she has taken 12 loans, mostly to grow family businesses, that have brought her family out of poverty.

At the end of 2013, VF AzerCredit had 74,372 active

borrowers like Fanira with a total portfolio of $71.8 million. In 2012, the loans disbursed by VF AzerCredit helped create 817 new jobs and sustain another 115,884.


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Impact: Fair Trade

• Investments targeted to Fair Trade will help small farmers, mainly in coffee and cacao cooperatives, create more environmentally and

financially sustainable livelihoods for themselves and their families.

Real-life Impact:

Calvert Foundation in partnership with Alterfin, a Belgian development finance cooperative, provides critical capital to coffee and cacao cooperatives. The Divisoria cooperative in Peru connects small coffee farmers with financing and access to


Luis joined the Divisoria cooperative when he switched from growing coca, the base ingredient of cocaine, to coffee due to the increased coca-related violence. With the increased revenue from his organic coffee, he now has a new roof for his house and has just invested in a facility to process harvested coffee beans.


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Impact: Ours to Own – Denver

• The Ours to Own: Denver initiative allows people to invest in small businesses and community development throughout the Metro Denver region.

Real-life Impact:

The Urban Land Conservancy (ULC) works to preserve important community spaces for community benefit. ULC has transformed Holly Square in Northeast Park Hill into a vibrant community center that includes a Boys & Girls Club, a local non-profit that is training and empowering the neighborhood’s youth, and Peace Courts, where kids of all ages can run around and shoot hoops.


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Impact: Ours to Own – Twin Cities

• The Ours to Own: Twin Cities initiative allows citizens to invest in small businesses that are creating jobs and opportunity throughout

Minneapolis and St. Paul.

Real-life Impact:

Through the Ours to Own initiative and the Community Reinvestment fund, a local partner, Gloria was able to receive financing to expand her business, Olu’s House, a licensed care organization that provides residential and in-home services to the elderly and persons with developmental disabilities or mental illness. Gloria has purchased a new facility and now employs nearly 100 people.


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Impact: Global Good

• An investment in our Global Good initiative will be put to use where it's most needed in our portfolio of nonprofits and social enterprises, and will contribute to creating a range of social benefits.

Real-Life Story:

Bubbly Dynamics is transforming an abandoned

meatpacking factory into a vertical farm and sustainable foods business incubator called "The Plant" with a

$540,000 working capital loan from Calvert Foundation portfolio partner Chicago Community Loan Fund (CCLF). The project, which will convert its own waste into biogas to heat and light the building, will also bring local foods to Chicago’s Back of the Yards neighborhood, a


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How impact investing works

at Calvert Foundation:


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Additional Impact Investing resources:

• The Forum for Sustainable and Responsible Investing (US SIF) – A

professional association focused on sustainable, responsible and impact investing that offers a financial director of investment products

• Global Impact Investing Network (GIIN) – Organization dedicated to

improving the effectiveness of impact investing that offers resources for investors

• Impact Assets 50 – A selected list of 50 impact investing fund managers

• Invest for Values – A resource on the different investment products that


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About Calvert Foundation

• Calvert Foundation is a 501(c)(3) organization that has been a pioneer in the impact investing space.

• In 1995, Calvert Foundation created the Community Investment Note, a fixed income product through which investors can help provide

economic opportunities around the world.

• In almost 20 years, more than 15,000 investors have collectively invested over $1 billion dollars.


Community Investment Note


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Community Investment Note

Investment type Fixed income

Minimum Investment • $1,000 direct or through brokerage account • $20 online at

Financial return 0–3% at terms of 1–10 years

Social return Measured annually by sector-specific indicators, and

reported to investors through Calvert Foundation’s Social Impact Report and quarterly updates

Liquidity Notes should be viewed as an investment to be held to

maturity, but Calvert Foundation may allow early redemption and partial withdrawals

Expenses None; Investor dollars are not used to pay sales

commissions, existing debt, or any other Calvert Foundation expenses


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100% repayment on investor principal and interest through: Diversified Portfolio:

– 100+ nonprofits and social enterprises with strong management, operations, financials, and capitalization

Professional Management:

– Industry-leading due diligence and monitoring – Over 98% underlying portfolio repayment rate

Security Enhancements:

– Over $45 million in sub debt, loss reserves, and net assets

*Past performance is no guarantee of future results. As with all investments, there is risk. Please read our prospectus before investing.


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Current Portfolio

24% 25% 27% 18% 6% Funding by Sector

Affordable Housing Community Development (U.S.) International Microfinance Social Enterprise

Fair Trade

60% 40%

Geographic Impact

International Domestic


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Learn More

For more information about how Calvert Foundation can help you meet your social and financial goals:

Phone: 800.248.0337


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Calvert Social Investment Foundation, a 501(c)(3) nonprofit, offers the Community Investment Note, which is subject to certain risks, is not a

mutual fund, is not FDIC or SIPC insured, and should not be confused with any Calvert Group-sponsored investment product. This document is neither an offer to sell nor a solicitation of an offer to buy these securities; the

offering is made only by the prospectus, which should be read before investing. Due to Blue Sky regulations, the current offering of the



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