The 2017 GSG Impact Summit - July 10/11, Chicago

A brief account by Ulrike Glatz.

The GSG Impact Investing Summit, being sponsored by the MacArthur Foundation (Julia
Stasch, President) and the Ford Foundation/US Impact Investing Alliance (Darren Walker) in
addition to Sir Ronald Cohen, took place in Chicago this year.

It was truly inspiring and insightful to be among the around 550 delegates from 44 countries in
Obamas city - although Trump Towers were not far off the Sheraton conference location

Sir Ronald Cohen, who is also known as the the father of Impact Investing, laid out the vision
and action plan for the Impact Investing Industry for the years to come, in order to achieve a
tipping point. An important milestone leading to a fast acceleration of the Impact Investing Industry,
as a prerequisite to achieving the 2030 Sustainable Development Goals:

Entrepreneurs:
The concept of Impact Investing & Impact Entrepreneurship needs to become popular, especially
among millennials. As a funny side note, Ronnie (as he is more familiarly known) suggested a
new greeting as an alternative to hello and take care: Do good - do well :)
Asset Owners:
Foundations should change their investment model. 5-10% of their endowments should be
invested in impact as well as 10% of their programmes should fund impact ventures. His
objective was to convince 50 leading foundations to do so, and implement Impact Investing as an
activity equal to their philanthropic endeavours. Furthermore, foundations should keep making
grants available for conferences on Impact Investing that help build the impact community as well
as for social ventures that need grants during their start-up phase.
Pension funds, being institutions that hold major assets, should be approached to also invest part
of their funds in impact. France was mentioned as a role model for a policy (90/10 approach)
which is necessary to allow pension funds to invest in impact.
Social Sector Organisations:
NGOs (that mostly offer services to the underprivileged) and profit-with-purpose companies
(focusing mostly on products for disadvantaged parts of the society) should start thinking bigger
as well as thinking of scaling their efforts based on their proven models - as capital in the form of
impact grants, social impact bonds etc is available in the market. That way they can serve their
target group not only within their region but beyond, be the engine of innovation and impact and
possibly bring about the next Steve Jobs to help us revolutionise the system for the greater good.
Governments:
Ideally, there should be a ministry (or part of a ministry, e.g. the Ministry of Industries) in each
country that is dedicated to impact and that reports directly to the prime minister or president in
order to tackle the SDGs and to bring Impact Investing into mainstream. So called outcome
funds should be implemented to leverage the procurement power of the governments.
Furthermore, 10% of development aid should go to paid-for-success projects. And a list of cost
of social issues should be published by the government so that Impact Entrepreneurs can come
up with solutions to tackle those issues at a lower cost.
Big Business/Corporates:
Another challenge Ronnie gave the Impact Investing Community present at the Summit was to
find leaders of big corporations to lead in the revolution, and for consumers and clients to exert
both internal pressure (as shareholders) and external pressure (as consumers/stakeholders) to
push big business toward the Impact Investing revolution.
Impact Investing Industry:
The Industry has outgrown its initial stage. Products like e.g. impact investment funds and social
impact bonds are defined and have been proven to work. Now, we are in the era of replication of
finance instruments and in the phase of standardisation. Hence this is where our focus now
needs to be.

Sir Ronald further underlined the urgency of our cause by stating that the birth and raising of
Venture Capital was a choice. Impact Investing is a necessity.

Ronnie is asking the world to rethinkIRRframework - away from traditional Internal Rate of
Return (Venture Capital jargon) to emerging Impact, Risk & Return (Impact Investment
vocabulary) in all financial decisions. Saying it with the words of Amit Bhatia (CEO, GSG Global
Steering Group for Impact Investing): The world agrees that probably a Noble Prize awaits an
Academician who can best frame the relationship framework, in academic parlance, of a fast
growing practice.

Another point in Sir Ronalds inspiring speech was the ability of the Impact Investing community to
trigger a chain-reaction within our current system that has the potential to positively shape the
state of the planet and of billions of people - all this by gradually changing the mindsets through our
actions. Putting it into a brief formula: Purpose + Capital = Impact 2

The moderator, Tracy Palandjian (Co-Founder and Chief Executive Officer of Social Finance,
a non-profit organisation which is leading the development of Pay for Success financing and Social
Impact Bonds), who moderated the Conference very eloquently and with a lot of charm,
summarised the main points of the conference as follows:

1) We need a system change from the current financial markets and mindset to conscious
capital.
2) We need to underline and be conscious of the urgency of our cause.
3) Impact Investing should become the new normal - hence our aim is to take Impact Investing
from niche to mainstream.
4) Governments as critical partners of the different players in the Impact Investing eco-system
to reach the SDGs.
5) Gaps in the eco-system need to be addressed (e.g. more investable products, a common
definition of impact, more standardised impact measurement).

A workshop by the OECD brought specially invited participants up to date regarding their Impact
Investing Taskforce.
A major focus, according to Karen Wilson (Private Sector Finance, Development Co-Operation
Directorate at OECD), is currently on
- developing a common agreement on definitions
(a topic that kept coming up during the different conference sessions)
- defining a framework for coordinated data collection and
- furthering efforts on the measurement of social outcomes.
All this to build the evidence base necessary to demonstrate the gains of Social Impact Investing
(also compared to existing social service models) and to identify and subsequently address
potential gaps in the Impact Investing eco-system.
Another focus is on giving guidelines for the different NABs (National Advisory Boards on Impact
Investing) to approach their respective governments in order to work out the policies necessary to
facilitate and promote Impact Investing in their countries. Based on her experience in working with
the Australian and other governments, Rosemary Addis (former chair of the Australian
Advisory Board on Impact Investing and current member of the GSG Executive Board) gave
concrete advise and examples on challenges and how to overcome them when working on this
topic. Diana Hollmann (GIZ) pointed out that the G20 Framework on Inclusive Business 2015 can
also be a good starting point and guideline.

Comments, exchanges and insights that I personally found inspiring:

The question David Wilcox (CEO of ReachScale) kept raising was why do we not yet have a
social unicorn? What is it that we as an industry are doing wrong that there is currently no venture
large enough (globally) that it generates a billion dollars of turnover. An interesting thought. Ulrich
Grabenwarter (Head of Strategic Development - Equity and Head of Venture Capital at the
European Investment Fund) challenged him with another valid point: The focus should not be on
an impact venture that generates 1 billion of turnover, but on creating one that positively affects a
billion lives. Id say, lets have both: a turnover of a billion by touching a billion lives :).

Ulrich Grabenwarter furthermore invited the audience to fund the inconvenient impact. Hence
to not only invest in renewable energies, social housing and access to finance - but look at
innovative impact models that also address other very important issues (such as those
encompassed by the Sustainable Development Goals).

I had an inspiring exchange with John L. Morris, Managing Partner of SOCAP, who agreed that
besides more capital for social change, we needed a transformation. A transformation of minds -
among capital owners and business owners as well as regarding how, as a society, we evaluate
success.
Here is how Id summarise these thoughts in a graphic:
This certainly is a simplified summary of a more complex topic. However, I believe a change in
mindset regarding the way we use money, see entrepreneurship and define success is
essential to move Impact Investing and its underlying values from niche to mainstream.

How to trigger and accelerate that shift is one of the topics of The Impact Clubs Think Tank which
we are planning to launch in 2018. Based on Change Management and Design Thinking tools, we
aim to elaborate a strategy and action plan to be implemented together with partners from the
impact community.

Furthermore, we are looking at driving the awareness about impact investing and at unlocking
private capital from Europe for impact ventures in emerging and developing markets.

If you would like to join the Think Tank or help to build The Impact Club which is still a very young
organisation or partner with us, please get in touch with me.

About the author: Ulrike Glatz

Contact: ulrike.glatz@the-impact-club.org

I am an entrepreneur (www.danaji.com) with a focus on the Indian market, a former
Management Consultant at Accenture (www.accenture.com) with a specialisation on
Change Management and the Founder of The Impact Club (www.the-impact-
club.org) - an Association promoting Impact Investing & Impact Entrepreneurship
with a focus on those who create and implement solutions to reach the SDGs: The
Impact Entrepreneurs.

However, I am foremost a person passionate about the impact investing movement which for me
stands for a deeper transformation we all need to go through - towards more consciousness in
every sense - and specifically how we do business, how we invest and measure success.