iGravity, Roots of Impact, the Impact-Linked Finance Fund (ILFF) and the GIIN organised a panel on the topic of “Mobilizing philanthropic capital into impact investing” at Building Bridges week. The aim was to inspire philanthropic organisations to think about different ways on how to make catalytic capital work for impact. A roundtable of renowned and experienced impact investors comprised by Debra Schwartz from the MacArthur Foundation, Fabio Segura from the Jacobs Foundation, Stephan Kappeler from the elea Foundation and Lucas Tschan from iGravity presented innovative solutions on how to deploy philanthropic funds creating impact where it is most needed.
The three key take aways
- Alongside more traditional philanthropic organizations, new approaches to deploy philanthropic capital have emerged in recent years. Mission focused entities have moved from traditional grant giving to more innovative approaches to create impact. Foundations have started to adopt social investing or impact investing as a new way to deploy funds while still putting impact at the core of all interventions. Impact investing enables philanthropic entities to fund innovation or support early-stage impact ventures driving long-term sustainable solutions.
- Through its catalytic nature, philanthropic capital is able to unlock other funds and create a ripple effect. Catalytic capital is patient, risk-tolerant, and flexible. It is capable to absorb the first layer of risk while mobilizing more traditional commercial capital to create lasting social or environmental impact. Philanthropic impact investing thereby enables additional private capital to flow into innovative solutions that otherwise would not have happened.
- To solve the big social and environmental challenges facing the world today, organizations across different sectors - non-profit, government, philanthropic and business - need to collaborate. Impact investing is still in the piloting phase and actors can learn from the growing base of evidence. Philanthropic capital not only helps to de-risk, but also encourages testing and learning while also strengthening partnerships and creating supportive ecosystems.