Getting a big return from change

Getting a big return from change

One of the most remarkable things about capital markets is that they have the ability to evolve to meet the needs of investors and businesses. Impact investing, one of the latest innovations to emerge, has the objective of providing new sources of funding to non-profit organizations and social-purpose businesses as well as providing new opportunities for investors to achieve a sense of purpose and a financial return from their ventures.

This is an incredibly exciting opportunity to catalyze change beyond philanthropic contributions and socially responsible investing. Many innovative foundations, private equity firms and financial institutions are getting on board: $324 million of new capital has already been raised for impact investment in just the first quarter of 2012.

In order to realize the full potential of impact investing, much work still needs to be done in raising awareness more broadly in the social sector and investment community. By building the capacity of non-profits to engage with investors, investment opportunities and new pools of capital can be brought together. There is also an important role for government and mainstream businesses, particularly those in the financial services sector.

This is why we at KPMG are very excited to officially launch our partnership with the MaRS Centre for Impact Investing (CII). The CII is a national social finance incubator and collaboration space designed to enable different sectors to work together to create the right conditions for impact investing to thrive. We believe in the power of business to drive social change—so much so that we have made community leadership a core part of our business strategy and embedded it into everyone’s role at our firm. Impact investing represents a convergence of our expertise and our passion to positively transform our communities.

Since announcing KPMG’s partnership internally a few weeks ago, the buzz from our people across the country has been tremendous. As a founding partner, KPMG will contribute expertise in support of the centre’s strategic initiatives. These initiatives include advancing the adoption of social impact measurement and the SVX (formerly the Social Venture Exchange), an impact-first platform connecting social ventures, impact funds and impact investors to catalyze new debt and equity investment capital for local ventures.

Our people are putting up their hands and asking to become involved. With impact investing, everyone has the opportunity to participate. If you are a director or leader of a non-profit organization, think about whether instruments such as community impact bonds might be an option to fund a future initiative—YWCA Toronto did this when seeking financing for the Elm Centre, the largest social finance project in Canada in the past 10 years. If you are a donor or investor, make a point of learning about impact investing and consider opportunities for your portfolio.

The MaRS Centre for Impact Investing is made up of a team of incredibly talented, dedicated professionals offering education and support. Whether you are a non-profit organization, a government official, a business leader or a curious individual, the CII has a host of resources available to you.

I encourage you to learn more about both the centre and impact investing.