Page 26 - midJersey Business - July/August 2015

SOCIAL PROFIT

TRENDING

IMPACT
kind of proit than inancial proit and to SOCIAL PROFIT AT WORK

do it well; they also need to produce some You don’t have to look very far to see how
inancial proit. They’ve got to be strong social proit is capable of transforming a
INVESTING
and healthy organizations.”
community through business partnerships.
So today’s—and tomorrow’s—non-prof- Last year Isles found that the munici-

it organizations are not all that diferent pal government in Trenton had no idea A sound strategy has the potential
from your business.
how many buildings in the city were
to grow inancially and socially for
A deeper look at what social proit is vacant or how much land was abandoned.
emblematic of is the old saying “a rising There was no public database.
savvy investors

tide lifts all boats.” A healthy, strong soci- “That’s one of those basic functions,”
ety is much more beneicial to growing a Johnson says. “You don’t know what
IMPACT INVESTING is a form of social
healthy, strong business than a crumbling you’ve got. You can’t solve any problems
that you’ve got to solve. You can’t start proit in which investments are made to not
community is. It is therefore the respon- only make money, but also to enact positive
sibility of business owners—particularly with the strengths that you have if you
social change.
small business proprietors—to prop up the don’t know them.”
According to Glenmede Trust Company,
environment around them, as it can im- So Isles created an interactive property
a privately owned trust irm with more than
prove their bottom line. It’s not just about survey that mapped 31,000 parcels across $29 billion under management, research
planting trees and feeding the homeless.
the city with students and volunteers
shows that impact investing can achieve
It’s about creating a strong community carrying handheld computers. They social goals and produce competitive and
that will support strong businesses.
came up with a database and a map that
even excess returns over a benchmark.
“The social proit they generate helps was posted online under the Trenton As impact investing has evolved, accord-
the inancial proits coming in for them,” Neighborhood Restoration Campaign.
ing to a white paper on the subject published
Grant says. “It keeps the communities The database tracks vacant land, but also by Glenmede, investor focus has shifted to
they work in stronger and builds relation- provides a backdrop for other civic analy- emphasize companies with positive environ-

ships that all businesses like to have. Once sis such as matching up high-crime areas mental, social or governance initiatives.
you see it that way, your thinking shifts to with abandoned properties.
Further, a 2014 report by U.S. Trust found

your community and the social proit you “The police can use this stuf,” John- that 63 percent of millennials own or are
most need.”
son says. “The businesses community; interested in impact investing, compared

developers can go in and see how many to 40 percent of Generation X. “The results
vacant properties are in an area and how indicate a clear shift in focus, an especially

you can start to package deals, so it really signiicant insight given the impending $41
drives the for-proit side, as well as the trillion wealth transfer from baby boomers to

There is $26 billion public side, as well as the non-proit side, millennials,” according to the paper. “Simul-
where civic associations can get their taneously, there has been an evolution in
the mindset of investors. Where investment
in maintenance and arms around what they have now in their
neighborhood and how to characterize success has traditionally been measured in
the context of proitability, research indicates
renovations needed those spaces.”
that impact investors contextualize their
for public housing They found that 21 percent of Trenton investments differently. This point is substan-
was vacant.
tiated by a 2014 J.P. Morgan survey, which
across the nation, “With those kinds of numbers,” queried 125 impact investors with $10 mil-
Johnson says, “it is far more important
lion or greater in impact investment capital.
according to the
to create an infrastructure where many The survey found that nearly 50 percent of
people can be part of the solution rather
impact investors will accept below-market
U.S. Department of than only one organization thinking they returns in the presence of impact goals.”
can go out and take it on.”
Some estimate that the impact invest-
Housing and Urban The project cost about $70,000, which ment market could grow to $3 trillion.
Isles received from a private-sector “And as the more socially conscious mil-
Development. Private
donor. It took seven weeks to complete, lennial generation of entrepreneurs build
brought hundreds of people together impact-driven businesses,” according to
money is seen as a
around the city and Johnson says it is Forbes, “you can be sure the supply of
now forming the base of lots of other impact investment opportunities will vastly
way to reduce that
analysis in Trenton.
expand.
“That’s the type of thing that normally
number.
would be the government’s job to do, to

24 midJersey business