By Mission Driven Finance

Grow Your Bank Account While Changing the World

Traditional thinking has historically divided money — and how to leave a legacy — into two distinct buckets: either making investments to generate profits, or making grants and donations to create social and environmental change.

But people are realizing these buckets don’t need to be separate — and, in fact, never really were. After all, every investment makes some kind of an impact, whether or not you’re aware of what that may be. So, why not be intentional about aligning your financial assets with your social values?

Indeed, many charitably-minded individuals are turning to impact investing to generate real social and environmental change in their communities, while simultaneously supporting their financial goals.

Impact investing — investing in companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return — is on the rise. It began to gain momentum 10 years ago, when people started to examine the disconcerting gap between traditional investing and philanthropy.

“There is a growing interest for people today, especially for Millennials and women, who want to connect with wealth managers and financial planners that are tuned into impact investing,” said Lauren Grattan, Co-Founder and Director of Community Engagement at Mission Driven Finance.

“Financial planners need to be responsive to the rising wealth of younger individuals who are asking for this,” she said. “If they don’t have these products available or the capacity to have meaningful conversations about personal and family values, prospective clients are going to pick another advisor.”

Community-Based Investing

Grattan and CEO David Lynn launched San Diegobased impact investment firm Mission Driven Finance in 2016 specifically to make it easier to invest in your community.

“Most major financial institutions have rolled out impact products, and that’s a great start for investors,” noted Lynn, who has spent two decades in traditional investment management, primarily for a philanthropic family. “But most of those funds are comprised of public equities, not organizations in your own backyard where you most want to leave a lasting legacy.”

“Our base premise at Mission Driven Finance is that it’s a very good, exciting thing to invest in your own community,” said Lynn. “Yet it’s really not all that easy to do. Even if you said, ‘I have a million dollars, and I want to invest — not donate, but invest — in local business in San Diego,’ you would face a lot of barriers on your own.”

Mission Driven Finance actively develops local impact investment opportunities that align investors’ personal values and legacy goals with those of nonprofits, social enterprises, and small businesses. The company serves as an intermediary between these powerful investments and investors, while also functioning as case managers that strengthen borrowers’ businesses.

More Than Philanthropy

It is clear that producing positive social change has become an American value. In 2017, Americans gave $410B to charity, for the first time crossing the $400B mark. But investable assets are in the trillions of dollars — orders of magnitude larger than philanthropy — and largely untapped for social change.

Impact investing takes philanthropy to the next level.

“Through impact investing, we can activate so much more money for social change and the things we believe in,” said Grattan.

Having spent a decade as a nonprofit fundraiser, she encourages individuals and families to “continue to donate, but also align your invested assets with your values. Donations alone are not enough to make the world we want to see, nor do they need to be the only way to create change.”

Co-mingling private investing with social change — rather than philanthropy and traditional investing living in separate worlds — is one of the most effective ways to achieve different, creative solutions.

“If we want transformative social change, then we have to pull in more public and private capital, and activating that capital then really becomes the new role of philanthropy,” said Lynn.

Impact investing can also alleviate some of the common, challenging dynamics of family philanthropy with multiple stakeholders — each of whom often has his or her own philanthropic priorities — and spark new conversations around creating cross-generational impact.

“With capital recycling back from successful impact investments, rather than a donation or grant being gone forever, the stakes to get the impact right are lower,” said Grattan. “For example, if Grandma wants to invest in early childhood development, and Grandson wants to help build clean energy infrastructure, they both can. The investments might not be simultaneous, but the possibility of both family members getting to see their priority projects move forward is more accessible than it is with donations.”

Educating & Inspiring Impact Investors

Fortunately, impact investors aren’t left to figure all this out on their own. Mission Driven Finance specializes in crafting local San Diego impact investments advancing economic opportunity in a number of different areas, including affordable housing, education, and refugee resettlement and integration. They do the difficult legwork of building up dealflow and packaging it together so that they can offer local impact investors fantastic, profitable options, while also attracting national institutional capital to invest in San Diego. In doing so, Mission Driven Finance helps ensure that real, lasting change happens in their backyard.

So how does Mission Driven Finance draw in the private capital that’s interested in social solutions? They begin by educating investors on impact investing to get them excited about crafting a legacy that really matters.

Mission Driven Finance regularly presents on impact investing to interested parties in the San Diego community, giving a comprehensive overview of what it is and how to get involved, in their “Impact Investing 101” presentation. They also offer custom presentations for individual investors and organizations who want to take impact investing to the next level — providing specific strategies and tools to activate assets and teach investors how to work with complex, high-impact transactions.

Beyond formal education sessions, Grattan and Lynn love to chat over coffee with investors who have expressed interest. “We really just want to get to know them, learn what they’re passionate about, and how we can help connect them with the best local investments based on their values,” said Grattan. “We ask them the important questions: ‘What are the things you care about? What are your goals financially? What is the legacy you’re looking to leave behind?’ and go from there.”

A Legacy of Community Systems

But it’s not only prospective investors that will leave behind a legacy — the Mission Driven Finance team will, too. What does that look like to them?

For Grattan, it’s a San Diego where everyone feels equally committed to making it an amazing place for all to live. “I want to cultivate a city where those with resources are committed to helping everyone else have an opportunity to thrive by investing in their community, their neighbors, and each other. That’s what makes me really excited, because we’re getting there.”

Lynn hopes that by helping to unlock more private money to do more good, Mission Driven Finance’s legacy will be one that permanently alters systemic structures which have traditionally held back so much social impact.

“If someone years in the future could say that significant change occurred in San Diego,” said Lynn, “that systems shifted to be sustainable and supportive, and that Mission Driven Finance was one of the architects of that change, then I’d be perfectly happy having that written for my obituary.”

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Visit and @MDFinanceSD for more information about impact investing and Mission Drive Finance.