Opportunity Zone investors want impact. Let’s help them get it.



ImpactAlpha, January 10 – Not since 2000 (with the New Markets Tax Credit legislation) has a tax policy so dramatically captured the attention of investors and community development practitioners as has Opportunity Zones.

Regulations have not yet been finalized. Opportunity Funds are just beginning to close. But our early belief is that large, positive impact for people and attractive returns for investors are both possible – and critical to the success of the Opportunity Zone legislation.

We have been surprised by the number of investors that are inclined towards positive social outcomes and are looking for ways to have impact. We are convinced that investors will embrace impact management as they create and execute investment strategies for Opportunity Funds. The uptake of impact management will be boosted by easily accessible tools and straightforward guidance for those investors new to impact investing principles.

What applications from 141 fund managers show about emerging opportunity zones activities

At Georgetown University’s Beeck Center, where we train students and incubate ideas for lasting change, we have focused on how Opportunity Zones will create value for the people living in these communities, as well as investors and developers. Our takeaways: Guiding principles matter (and we’re building them). Investors want impact (and we’re harnessing demand). And success requires unexpected partnerships (and we’re facilitating them).  

Opportunity Funds are being launched by both mission-driven as well as traditional investors. For example, the partners behind the $250 million Emergent Communities Fund—Enterprise Community Partners, Beekman Advisors and Rivermont Capital—are focused on revitalizing small cities and towns throughout the United States.

Enhancing impact

Our takeaways suggest a few avenues for enhancing the impact of Opportunity Zones:

1. Guiding principles matter. The final version of the Opportunity Zone legislation failed to include any impact reporting requirements or reference to impact objectives. The Beeck Center has been working with national and local community organizations, the investor community and other stakeholders to ensure there will be a real investor emphasis on impact. We have drafted an impact framework and guiding principles to be issued early this year to help guide investors towards impact, with the expectation that many of these stakeholders will commit to adopting these recommendations.

2. Investors want impact. Demand for tools to guide impact is high. The Beeck Center hosted real estate developers and other investors and engaged in roundtable discussions with venture capital firms and major financial institutions in New York to discuss Opportunity Zones and socialize the guiding principles and impact framework. Firms are eager to ascertain the efficacy of the legislation, attract capital from impact players, engage community voices in the process, determine ways to include social outcomes in return calculations and set up the tax incentive for potential policy success and extensions. The Beeck Center is forming an Opportunity Zone Investor Council of leaders inclined towards impact that will be committed to transparency and early adoption of the guiding principles and impact framework.

3. Success requires unexpected partnerships. We are optimistic about the possibilities that Opportunity Zones offer to address economic inequality and barriers faced by underinvested communities and believe that this new legislation will result in new types of partnerships and models for development in low-income communities. Collaboration and collective action will require intentionality, transparency, and understanding unintended consequences.

Six ways to attract capital and shape the future of opportunity zone investing

Atlanta’s opportunity

We recently toured of Atlanta’s Opportunity Zones with the many actors putting a stake in the future of Atlanta. The group included venture firms, family offices, foundations, community development experts, and local entrepreneurs. The city, like other U.S. cities, hopes to leverage Opportunity Zones to attract capital to distressed areas and deliver jobs, wealth opportunities and better outcomes for the city’s low-income communities.

Atlanta’s central business district represents the heart of the city. Vine City, close to the new Mercedes Benz Stadium, is an area full of rich civil rights history yearning to be told and celebrated. Yet much of the residential space there remains unoccupied. Fort Mac, a former Army base and home to the expansive and financially successful Tyler Perry Studios, has 145 acres of Opportunity Zone development potential and is poised to harness the value of the creative economy.

Hiding in plain sight: More than 100 funds that are investing in the creative economy

Will Opportunity Zones be a tool for gentrification and a boon to investors at the expense of the residents in these communities? Or will investors see the potential to deliver social value and financial returns? Absent changes to the legislation, that outcome will depend on how investors and communities take up and drive toward impact goals together.


Lisa Green Hall is a senior fellow and Jennifer Collins is a resident fellow at the Beeck Center for Social Impact + Innovation at Georgetown University.

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