Real Impact: The New Economics of Social Change

by Morgan Simon

Overview

A leading investment professional explains the world of impact investing--investing in businesses and projects with a social and financial return--and shows what it takes to make sustainable, transformative change.
Impact investment--the support of social and environmental projects with a financial return--has become a hot topic on the global stage; poised to eclipse traditional aid by ten times in the next decade. But the field is at a tipping point: Will impact investment empower millions of people worldwide, or will it replicate the same mistakes that have plagued both aid and finance?
Morgan Simon is an investment professional who works at the nexus of social finance and social justice. In Real Impact, she teaches us how to get it right, leveraging the world's resources to truly transform the economy. Over the past seventeen years, Simon has influenced over $150 billion from endowments, families, and foundations. In Real Impact, Simon shares her experience as both investor and activist to offer clear strategies for investors, community leaders, and entrepreneurs alike. Real Impact is essential reading for anyone seeking real change in the world.

Product Details

ISBN-13:	9781568589800
Publisher:	PublicAffairs
Publication date:	10/03/2017
Pages:	256
Product dimensions:	6.50(w) x 9.30(h) x 1.50(d)

About the Author

Morgan Simon is a widely-recognized leader in impact investment who builds bridges between finance and social justice. Over the past seventeen years, she has influenced over $150 billion in capital. Simon currently co-leads Candide Group, which supports two clients, including members of the Pritzker family. She is also co-founder and chair of the non-profit Transform Finance.

Previously, Simon served as the founding CEO of Toniic, a global network of impact investors, and as the founding executive director of the Responsible Endowments Coalition. She has worked with the United Nations in Honduras, in corporate reform with ForestEthics, and in domestic microfinance with the Women's Initiative for Self-Employment. She currently serves on the boards of the Restaurant Opportunity Center, The Working World, and CARE Enterprises. A graduate of Swarthmore College, Simon serves as an adjunct professor at Middlebury College's graduate school program. She lives in the Bay Area.

Table of Contents

Introduction: Getting Real 1

Chapter 1 The Limits Of Charity 11

Chapter 2 Economic Activism and Impact Investment 21

Chapter 3 The Limitations of Impact Investment 47

Chapter 4 Scaling Smart 77

Chapter 5 How To Get It Right 93

Chapter 6 Engaging Communities 101

Chapter 7 Adding More Value Than You Extract 117

Chapter 8 Balancing Risk and Return 125

Chapter 9 Maximizing Impact 141

Chapter 10 Real Impact At Scale 161

Chapter 11 What You Can Do 191

Conclusion: Asking Questions 215

Acknowledgments 217

About Transform Finance 225

Notes 227

Index 235

Editorial Reviews

05/22/2017
Simon, founder and chair of the nonprofit Transform Finance, opens this fast-paced, provoking book with a crash course in impact investing, “the trillion-dollar trend most people have never heard of.” As she explains, impact investment (the Rockefeller Foundation’s term) means investing for social benefit as well as profit. Simon starkly concludes that the current, well-intentioned “free-market-plus-charity model” hasn’t effected substantive change. According to a study cited here, only 12% of foundational giving goes to social-justice causes; the rest supports education and arts organizations that largely service the already wealthy or at least economically secure. Rather than raising relatively small amounts of money expressly for charity, impact investing seeks to leverage the much larger sums in the global economy by pressuring companies to do better with their money. Simon talks frankly and critically about established philanthropic practices, stressing that wealthy donors must not wholly control the process of dispersing funds. Her bracing, hard-hitting message for big business is accompanied by advice for middle-class investors, who are encouraged to move personal accounts from big banks to community banks and clean up their stock holdings. Clear-eyed, explicit, and tinged with just the right amount of outrage, this is a clarion call that the world of well-meaning social-justice activists needs to hear. Agent: Victoria Skurnick, Levine Greenberg Rostan. (Oct.)

Publishers Weekly

"Morgan Simon has made a significant contribution with the very big idea that we can change the world by changing how we all relate to money. And lucky for us, Simon is as entertaining in her writing as she is brilliant in her concepts."—Van Jones, CNN

"Impact investing is a subject that deserves in-depth, powerful scrutiny. Real Impact offers much of that, and will give readers an introduction into understanding where this kind of work can bring hopeful change and where it can't. Timely!"—Bill McKibben, author of Deep Economy

"Where we invest speaks to our values as a country that prioritizes our collective social welfare. Morgan Simon's innovative investment approach ensures money can serve as a force for good, for everyone."—Congressman Keith Ellison, member of the House Financial Services Committee and co-Chair, Congressional Progressive Caucus

"Real Impact is a unique and valuable teaching tool. Morgan Simon's expertise in the field is unparalleled, and brilliantly shared through this book."—Vikram Gandhi, Senior Lecturer, Harvard Business School; former Vice-Chairman of Investment Banking, Credit Suisse

"Real Impact is a gift to the academic community. I know of no other resource available with such a balance of thought-provoking investment philosophy and practical advice—reflecting the depth of Morgan Simon's expertise and experience in impact investment."—Heidi Krauel Patel, Lecturer in Management, Graduate School of Businessat Stanford University

"A critical cautionary tale—how do we scale social impact investment without leaving anyone behind? Morgan Simon is a master practitioner at inclusive investment; read Real Impact to learn from her compelling example."—Ben Jealous, Partner,Kapor Capital and former President, NAACP

"To drive significant social and environmental progress around the world, investors need to understand how to structure and deliver capital in a way that works for high-impact enterprises. Real Impact highlights the complicated trade-offs they will face along the risk-return spectrum and offers a blueprint for market growth. It helps fill the knowledge gap between optimism and execution."—Debra D. Schwartz, Managing Director of Impact Investments, MacArthur Foundation

"Over 1,700 asset owners around the world, from pension funds to insurance companies and sovereign wealth funds, have become signatories to the UNPRI, as its becomes increasingly clear that social and environmental trends can create financial opportunities. Investors now have the capacity to help solve the world's problems and deliver strong returns for their beneficiaries and clients. Morgan Simon is a global leader in impact investing, and this book offers critical lessons for those interested in being on the cutting edge of this exciting new field."—Dr. James Gifford, Founder and former Executive Director, United Nations Principles on Responsible Investment; Senior Impact Investment Strategist, UBS

"Clear-eyed, explicit, and tinged with just the right amount of outrage, this is a clarion call that the world...needs to hear."- Publishers Weekly



"A clear-eyed case for socially conscious investment, of much interest to those who want their dollars to do good." - Kirkus Reviews



"Readers interested in social and economic justice, climate change, housing, gender equality, and other pertinent topics will be compelled by Simon's exploration of impact investment as a creative way to challenge social problems in global and local contexts." - Booklist

From the Publisher

09/15/2017
Impact investment is "selecting for-profit investments in light of…awareness of the social and environmental outcomes of such investments," writes Simon (coleader, Candide Group), who sees great potential for impact investment to foster positive, systemic economic change. This book is in part a warning to impact investors to avoid what the author regards as the failures and limitations of philanthropy, microfinance, and fair trade. Her critiques of these three methods are thought provoking, as is her argument that the nub of poverty is the lack of economic autonomy. The more distinctive, second part of the volume discusses practical ways to implement impact investment using three principles: "engage communities in design, governance, and ownership"; "add more value than you extract"; and "fairly balance risk and return between investors, entrepreneurs, and communities," followed by real-life examples of such implementation. One need not share Simon's progressive political sensibility to make use of the principles and tools she proposes. VERDICT Though at times emotional and needlessly autobiographical, this book's focused, practical aspects are insightful and informative and will appeal to those seeking realistic ways to alleviate poverty.—Shmuel Ben-Gad, Gelman Lib., George Washington Univ., Washington, DC

Library Journal

2017-08-06
Investment adviser Simon outlines the concept of impact investment, "the practice of investing not just for profit, but also for social benefit."In some ways, impact investment aligns with Bangladeshi financier Muhammad Yunus' experiments in microfinance and what he is now calling "social business," giving would-be entrepreneurs in developing countries opportunities to enter the marketplace. Simon holds that some of Yunus' programs, however, have not scaled well in the marketplace and may have worked backward; the first step, she suggests, is to "identify a good idea that has a mix of qualitative and quantitative, micro and macro approaches to addressing poverty and structural inequality"—and always with an eye to profitability. In her understanding of impact investment, a great deal of due diligence is involved to assure not only that investors' money is well placed in projects that do good in the world, but also that communities are well served. To this end, Simon offers a series of operating principles—e.g., the call to "add more value than you extract," again with an eye to such things as providing long-term, well-paying jobs to help break the cycle of poverty. Throughout, Simon insists on some of the basic tenets of capitalism, including the notion that the value added should yield return on investment. Even so, she counsels that investors take steps that, en masse, would shake Wall Street to the ground, such as the thought that the conscious impact investor should "break up with your bank" and look to community banks and other institutions that are better inclined to social justice. Simon also suggests that investors realign their portfolios so that they know, as the adage has it, where their money spends the night, investing in funds that provide small loans to entrepreneurs, funding for sustainable agriculture projects and water systems, and the like. A cleareyed case for socially conscious investment, of much interest to those who want their dollars to do good.

Kirkus Reviews