Highlights from a Sorenson Impact Institute Virtual Convening in partnership with Blue Haven Initiative
Investors seeking positive returns and social and environmental change are exploring ways to deepen their impact through policy-related interventions. By building policy awareness through partnerships and other methods, they can identify opportunities, mitigate risks, and align strategies with supportive regulatory environments.
Despite this potential, many investors have yet to fully integrate policy considerations into their approach. This gap represents an opportunity for forward-thinking investors to develop more comprehensive strategies that consider both financial and policy-related factors in their decision-making process.
To explore how investors can leverage policy to enhance returns and impact, Sorenson Impact Institute hosted a virtual convening with investors and partners with experience in investor-supported policy advocacy. Lindsay Zizumbo of the Sorenson Impact Foundation hosted the conversation, which was moderated by Liesel Pritzker Simmons of Blue Haven Initiative and included panelists Louis Caditz-Peck of the Responsible Business Lending Coalition, Jacob Haar of Community Investment Management, and Ryan Werder of the Energy Action Fund.
Simmons shared her aha moment that prompted Blue Haven Initiative, a family office, to expand its civic engagement efforts into the policy sector. During a presentation about Blue Haven’s climate-related investments, she was asked which had the best ROI in terms of impact. She realized it wasn’t any of the typical investments but rather the efforts her husband, Ian, had devoted to youth voter turnout over several decades.
“That is probably the best investment Blue Haven has made from a time, energy, money perspective,” Simmons said. “It made me think, why aren’t we doing a better job of connecting the impacts of our investments with the kind of civic engagement, political engagement, and policy engagement that we have been doing over on our civic side?”
Blue Haven has a history as a politically engaged single-family office, but Simmons said in the last year they have reached out to fund managers and partners to ask how they could support through investments in policy engagement. Speaking up for new or different policies can provide a more conducive environment for new approaches to social and environmental impact efforts, she said. “The impact investing community sort of comes from a business-can-solve-everything standpoint,” she said. “And I think the last few years, in particular, have been a very humbling moment for that.”
Advocating for Responsible Lending and Policy Innovation to Drive Long-Term Change
It’s also a way for investors to engage in a nonpartisan manner but speak up for changes that make a long-term difference. Haar said policy advocacy has been part of Community Investment Management’s theory of change since the beginning. The firm works with FinTech partners focused on responsible lending to expand access to capital. As part of that, Community Investment Management advocates for policy that supports innovation. “We want to create space for new models to solve ways in which the world is broken,” Haar said. “Policy really is front and center as we think about creating that change but doing so in a way that is fully rational with our investment goals too.”
“We want to create space for new models to solve ways in which the world is broken,” Haar said. “Policy really is front and center as we think about creating that change but doing so in a way that is fully rational with our investment goals too.”
Over the last decade, he has seen the importance of aligned policy engagement for risk management as well as community impact. “It’s been a bit of a journey of figuring out how the power of our voice can really accompany our investments and the investments give credibility to that voice,” Haar said. “Often we can do so much more with our voices than we can by just keeping our heads down and investing.”
Much of that advocacy work has been done as part of the Responsible Business Lending Coalition, which includes for-profit lenders, nonprofits, and small business groups seeking better financing options for small businesses. It’s also advocacy that transcends partisan politics, Haar said, as many of the issues — job creation, innovation, support for small business — have bipartisan support. “We’re asking for regulatory sandboxes and opportunities to do things in a different way,” Haar said “But at the same time, we also need to be advocating for regulation to keep up with many of the new ways that we’re approaching things so that we don’t just create new and innovative ways to rip people off.”
Coalition and Investors Seek Small Business Growth and Economic Inclusion
As Executive Director of the Responsible Business Lending Coalition, Caditz-Peck collaborates with Haar and other leaders of nonprofit and for-profit organizations to establish regulations that allow small businesses and impact investments to flourish. That includes an Illinois initiative supporting a bill that would provide price transparency for small business financing, which in turn would drive economic development and financial inclusion. “We’re projecting that it could save small business owners between $175 million and $835 million every year in unnecessary fees and interest, with huge benefits of that going particularly to black and Hispanic business owners,” he said.
The coalition established an investors council to encourage members of the impact community to stay informed and get involved in issues that are relevant to them. In turn, the coalition builds relationships with mission-focused investors who can bolster its policy work. “Philanthropy is generally pretty reticent to engage in policy, so there are these opportunities where small amounts of money can just have a massive impact,” Caditz-Peck said.
“Philanthropy is generally pretty reticent to engage in policy, so there are these opportunities where small amounts of money can just have a massive impact,”
He also emphasized the nonpartisan nature of the coalition’s work. “We’re not advocating for or against certain candidates. We’re just saying … that small businesses deserve to know the prices they’re going to pay.”
The impact investor perspective — advocating for policy that bolsters markets and social good — can carry unique weight with policymakers, Caditz-Peck said. “When you come and say, ‘We are capital, and we want this change to happen,’ that’s just giving the legislators permission to do what they often want to be doing anyway,” he said.
Shaping Policy to Empower Small Businesses and Drive Economic Inclusion
At the Energy Action Fund, Werder oversees advocacy efforts for the c4 sister organization to the Energy Foundation. He connects investors and donors with aligned advocacy campaigns to create collaborations that can fulfill several purposes.
As one example, he points to investor-supported advocacy for renewable energy standards in Illinois. “A lot of that was driven by larger corporations that had clean procurement goals. The presence of those investors made a real impact,” he said. “They were a heavy counterweight to utilities or heavy industry … and brought a business case and an investment case that showed policymakers that the state had a path forward to growth in this, and that was really meaningful.”
After the energy policy was adopted, EAF evaluated the financial impact of the advocacy effort and found a 2000-to-one return on investment for the donors. “It’s actively reshaping the Illinois economy to be more just, clean, and resilient” as well, Werder said.
Watch the full conversation:
Sorenson’s Virtual Convening Series features solutions-oriented discussions with members of the Institute and its community of impact leaders. Together, we take a deep dive into the most pressing issues of our time, exploring challenges, opportunities, and learnings to scale actionable solutions. Watch past conversations here.
