The Brief | May 9, 2018

Foundations going big in impact investing, a better way to bank, electric vehicles in rural China

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Greetings, ImpactAlpha readers!

Double Feature: ImpactAlpha Originals

Foundations start to “go big” in impact investing. Where do foundation presidents go to exchange their strategies for moving more capital to mission? The biennial conference of Mission Investors Exchange next week in Chicago will convene dozens of foundation presidents representing tens of billions of philanthropic capital. Some foundations are still dipping their toes into impact investing; others are all-in. Students of philanthropy, for example will be watching the opening discussion among Ford’s Darren Walker (who carved $1 billion from a $12 billion endowment), Heron’s Dana Bezerra (“100% for mission”) and Hewlett’s Larry Kramer, an impact investing skeptic (who last year authored an article on foundations and impact investing titled “Down the Rabbit Hole”).

Place and race will be at the top of the conference agenda, says Matt Onek, CEO of Mission Investors Exchange. “The imperative and the urgency for foundations to align more assets to mission couldn’t be greater right now,” Onek told ImpactAlpha. “With more voices seeking to participate and new tools for impact and collaboration, there is increasing awareness that impact investing needs to be done at a greater level of sophistication and scale to achieve the systemic changes our communities need.”

Read the Q&A with Mission Investor Exchange’s Matt Onek, “All Hands on Deck: Foundations start to ‘go gig’ in impact investing,” by David Bank on ImpactAlpha.

Keep track of the headliners at the Mission Investors Exchange conference with “Mission Forward: Foundation leaders meet to talk place, race and impact,” by Dennis Price on ImpactAlpha.

Signals: Ahead of the Curve

Getting customers to believe banking can be better. Scandals, high fees, bad service and practices that prioritize corporate needs over customers. That’s what U.S. consumers expect from their banks. That’s also part of what led the Hewlett Foundation to launch a campaign to raise the profile of sustainable retail finance. Even though there’s plenty of evidence people want a different kind of bank, very few people have heard of a sustainable bank, let alone signed up for an account with one. Even when sustainable financial products appear, customers are skeptical.

Aspiration, a new banking and investment services firm that offers low fee, interest bearing checking and fossil fuel- and firearm-free investment accounts, says about 70% of those who don’t complete its sign up process say they believe there’s a catch. “It speaks to the fact that people’s expectations have been so beaten down,” says Andrei Cherny, Aspiration’s founder. Financial institutions offering sustainable banking services have to work hard to convince customers banking can be different.

  • Creative marketing… On Earth Day, Aspiration launched a campaign to get a million people to commit to sustainable banking, while robo-impact investor OpenInvest times the launch of new investment themes on its platform around key dates, like its anti-human trafficking impact category, announced on the U.N.’s World Day against Trafficking in Persons.
  • Matches and guarantees… Aspiration has pledged $22 of its own capital to every new Aspiration Redwood account opened by the end of June: $11 dollars to the new account and $11 to a conservation nonprofit, while robo-advisor Motif offers customers fee refunds if its portfolios underperform.

Agents of Impact: Follow the Talent

Richard Fahey, a long-time Skoll Foundation executive, has been named interim president of the Skoll Foundation. Sally Osberg, who led Skoll for 17 years, stepped down on April 30. Roger Liew, the chief technology officer at ShopRunner, has joined Chicago-based impact investor Impact Engine as an Operating Partner. Impact Engine is recruiting a communications coordinator.

Dealflow: Follow the Money

Shenma Finance expands electric-vehicle loans in rural China. Shenma Finance raised $47.3 million in Series C financing for loans to rural Chinese to buy small electric vehicles. Get the details.

SJF Ventures leads $11 million financing for mPulse Mobile’s healthcare messaging services. The Southern California company uses artificial intelligence to communicate with patients and send them reminders via SMS and mobile chat. Read more.

Produce giant Del Monte invests in vegetarian meal-kit company Purple Carrot. The Cambridge, Mass.-based startup has given the popular subscription-based meal kit model (think Blue Apron) a vegetarian twist. Dig in.

Filipino edtech startup Edukasyon raises expansion funding. Edukasyon, based in Manila, has an online platform that helps students find high schools and colleges, plan their education and careers, and apply for scholarships. Learn more.

— May 9, 2018