Impact investing

Impact Investing and Foundations

We start this blog series with the topics presented at Impact Summit Europe (April 2-3 in the Hague), providing a summary of the discussions together with our thoughts. We start with the session ‘ Impact Investing and Foundations on the role of Mission-Related Investing (MRI)’.


Aligning an investment portfolio with an institution’s values is a growing trend, particularly for foundations. These institutions often have well-defined goals and missions, and as a result they can more easily determine what fits well in the portfolio, what does not fit, and what is positively contributing to the foundation’s mission. Families – particularly when they are more involved in managing the portfolio – also have an easier time defining what they stand for and judge their holdings through this lens, rather than only through the traditional lenses of expected risk and return. But let’s start with some definitions. It is important to highlight regional differences and as well as the different ways in which program- and mission-related investing are used.

In the U.S. program-related investing, or ‘PRI’, is defined under U.S. tax law as an investment whose primary purpose is “to accomplish the foundation's exempt purposes”. In the panel at Impact Summit Europe, Ford Foundation provided examples such as investing in first time managers and strategies (i.e. unproven as a portfolio management team, or new to a strategy) which tend to bear a higher risk. These program-related investments count towards the required 5% spending. Mission-related investing, or ‘MRI’, pertains to the rest of the portfolio – or the other 95% of the endowment – where the Foundation makes market-rate investments (i.e. with returns comparable to those available via traditional instruments), but with the goal to also achieve social impact. In line with their main mission of greater social justice, Ford Foundation invested in social housing in the U.S., aiming at social good and market-rate returns.

The goal of Nesta, a U.K. foundation whose mission is to support innovation for public benefit, is to create an environment for impact investments. Within Nesta it is an operating charity – not the main fund – that took on the endeavour, as stakeholders deemed it too risky to tackle it using the main portfolio, which remains focused on generating returns. The ambition for many is to use what they learned making program-related investments – using the capital available for the foundation’s spending or grants – to also align the portfolio of the endowment. A maturing impact investment market can achieve that – to showcase how market-rate returns can be obtained at the same time as generating a positive social or environmental impact.

Fondazione Social Venture Giordano Dell’Amore presents similarities with Nesta as the Foundation (part of Fondazione Cariplo, one of the largest foundations in Italy) was created to foster the growth of the impact investing ecosystem in Italy. The Foundation’s endowment is put to work to through both direct and indirect equity investments into businesses tackling relevant social and environmental challenges in Italy with sustainable and innovative business models. The Foundation applies a social venture capital approach with an “impact first” focus, leveraging patient capital to support innovation in different economic sectors including welfare, environment, social services & integration, arts & culture, sustainable tourism, and more.

FSG, a mission-driven strategy firm set up as an NGO, helps corporations and foundations to bring impact at scale and developed a framework to explore the continuum of market-rate or commercial investments, sub-commercial investments, and grants. Their idea, which is also the name of their project, is to move “beyond trade-offs”, or give up the notion that to achieve impact one must give up returns, or vice versa, that market rate investments cannot achieve impact goals. At times sub-commercial capital is needed as a bridge or – as we have seen in the case of Nesta and Giordano dell’Amore – to build capacity and create an impact investing ecosystem.

When discussing mission-related investments – or using the portfolio to also generate impact – questions pertaining to fiduciary duty tend to arise: What impact is expected? Are other investments available targeting a higher return? What is the risk? With a mandatory spending rate of 5% U.S. foundations target high returns (typically an expected return of 7%, assuming 2% inflation rate, to ensure the endowment’s perpetuity). Hence, they need to weigh the benefits of mission-related investments against the duty to also generate high returns. Ford Foundation spoke about combining an assessment of risk alongside that on the expected return.

The discussion on the topic of mission-related investing then naturally turned to impact measurement – if the goal of an investment is also impact, then measuring it is necessary. Unfortunately, some investors are discouraged by the lack of standards and tools. Nesta described the process of narrowing down measurements to a few key metrics and only investing where there is a sufficiently high potential to achieve the desired outcomes. Fondazione Giordano dell’Amore spoke about the creation of an “evaluation lab” dedicated to measuring impact but conceded that greater diversification, and in their case in several different ventures, can make it complicated to measure and aggregate results.

To summarise, it is possible to invest in line with an institution’s mission. Doing so requires some degree of soul searching, conversations with stakeholders, and understanding of key risks. Program-related investments, that are funded by spending and founded via the investment portfolio, have been designed to foster an impact ecosystem and have consequently provided the soil upon which to build mission-related programs. The measurement of impact can be tricky, but it should not discourage investors from trying their hand at investing in alignment with their mission.

In the next posts, Phenix Capital will take a more in-depth look at related topics such as impact measurement and outcomes-funds. Stay tuned!

Gearing Up For A Dutch National Advisory Board For Impact Investment

In order to stimulate impact investments, a worldwide movement has been developed under the leadership of the Global Steering Group (GSG): the National Advisory Board (NAB). 21 countries and the EU as a whole have adopted a National Advisory Board. NABs bring all stakeholders within the field together, and as such the knowledge and know-how of local success stories are shared to be utilised worldwide.

Is there a need for an NAB in the Netherlands? Phenix Capital, together with Social Finance NL and other investment consultants C-Change and Enclude Holding, have addressed this question involving a number of key stakeholders3. The conclusion: such need is there!

Click here to read the full report.


Leading Dutch financial institutions embrace United Nations’ Sustainable Development Goals







Amsterdam, 6 December 2016

Last year, the UN set out the Sustainable Development Goals (SDGs) for 2030, a set of 17 highly ambitious goals relating to climate, poverty, health care, education, and other challenges. Institutional and private investment capital is critically needed to help finance the $5-7 trillion that is needed each year to finance the 2030 Agenda.


Tomorrow, 18 Dutch financial institutions, which collectively manage over €2.8 trillion in assets, will invite the Dutch government and Central Bank to continue to make a concerted effort with them in support of the SDGs. The Initiative is the first in the world to bring together national pension funds, insurance firms, and banks around a shared SDG investment agenda. Board representatives of the Signatories will present their call for further cooperation and collective action to Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation, at the Global Impact Investing Network (GIIN)’s conference in front of over 700 investors.


The consortium believes that it is not only of societal importance, but also in the interest of their investors and business relations, to consider the largest social and environmental challenges of our time in their work and investments. In their report ‘Building Highways to SDG Investing’, its signatories recommend priorities for maximizing ‘SDG investing’ (SDGI) – at home as well as abroad.


The SDGI agenda is a result of a six-month consultation process with more than 70 fellow investors, government representatives, and expert practitioners. In their report the signatories offer concrete ways in which to accelerate and scale investing in the SDGs. Further conversations will take place over the course of December, including a cross-sectoral stakeholder consultation at the Dutch Central Bank on the 14th of December.


The Signatories look forward to collectively build Dutch ‘SDG investment highways’ in the years ahead. Per Herman Mulder, co-facilitator of the SDGI Agenda: “In today’s tumultuous world, public-private action is ever more important as a driver for positive change. The 2030 Agenda offers not only a challenge, but also an opportunity to collectively do well by doing good.”  



For more information:

-         The report ‘Building Highways to SDG Investing’ will be released tomorrow at 10 AM on

-         For questions, please contact Veerle Berbers – SDGI Communications

+31 6 24236642 /


Catch Sophie Robé speak at the GIIN Investor forum

Sophie Robé will be speaking at the GIIN Investor forum 2016, taking place on December 7-8 at Amsterdam.

The Global Impact Investing Network is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing. With over 80 speakers and 600 delegates from more than 30 countries across the world attending, the GIIN Investor Forum is the landmark event for anyone who is involved in impact investment or is interested in engaging with the industry.

Sophie will be speaking at the working lunch session on ‘Implementing impact investment strategies-Knowledge accelerator’ in the afternoon of December 7th along with Giselle Leung, Director of GIIN, and Kurt Morriesen, Senior manager, Investment practices - Alternatives, PRI association. In the session, the development of Impact investment since inception to the current stage will be explored. An overview of the impact investing industry and the key stages in development of impact investing will be provided to those who are new to the market.

Phenix Capital is looking forward to attending the GIIN Investor forum! More details on the event can be found here.


Save the date - Impact Summit Europe 2017 - March 21 / 22 - the Hague

Shaping the Future of Impact and Sustainable Development Investing

Not why, but how?

An increasing number of institutions share the conviction that investment capital can effectively address social and environmental challenges.

The focus is no longer why impact investing, but how?

The Impact Summit Europe offers you a platform to exchange best practices, challenges and opportunities in the Impact and Sustainable Development Investing across asset classes.

During the summit, recognized leaders of the impact investment industry will gather, providing a unique networking and educational opportunity, sharing their experiences managing for impact across plenary and breakout discussions.

This year, the summit will take place on 21-22 March at the Peace palace, the Hague. For more information about registration, participation or sponsoring, please contact us via e-mail or visit our website

Catch up with Impact Summit Europe 2016 here