Impact investing is the practice of investing to both seek a financial return and create tangible social or environmental benefits. It is a tool that is emerging in philanthropy providing foundations new ways to use their capital more effectively and create social impact while possibly gaining a financial return or return on capital. The goal of this project was to support the Council of Michigan Foundations’ (CMF) efforts to provide impact investing education and resources for the CMF community of philanthropy. It provides a starting point for foundations that are interested in this emerging practice that can support their missions, help nonprofit or for-profit organizations work towards social impact in their local communities, deploy more capital, and leverage partnerships with other community investors.
The report includes information on the key features of impact investing, including history on the emergence of the practice and the various investment vehicles and commonly cited barriers to impact investing in Michigan. It also provides the steps for foundations considering starting their impact investing journeys and best practices informed by the impact investing literature and several interviews conducted with Michigan-based foundations. Finally, the report provides a list of sectors that are ripe for impact investment recommended by foundations previously interviewed by CMF.