Investing for a Triple Bottom Line: Craig and April Chapman
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— by Craig and April Chapman
As we launched Impact Foundation, Jeff and I have searched for board members who share an excitement for kingdom impact investing and who have skills and experience to share. We found that and more in Craig and April Chapman. We asked the Chapmans to describe their experiences investing for impact. Here, in their own words, is there response.
Over the last few years, our paradigm about how best to provide financial support to organizations serving those in greatest need has been shaken up, if not blasted apart, by the notion of “impact investing.”
Historically, we have set aside some amount of our personal financial resources to go to non-profits - i.e. organizations that improve the lives of others - with the goal of impacting not only their physical, emotional or educational needs, but also pointing them to God. Frankly, we love being generous with our financial resources, mostly because it’s a tangible way of loving our neighbor, but also because it’s really all God’s money anyway.
The problem is that once we give the money away, it’s gone – and we have to continue making money in order to give more away. Clearly, that is not a sustainable strategy unless we have an unlimited capacity to make money. That’s where impact investing comes in.
One online dictionary tells us that “impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". In a practical sense, this means that we can invest in for-profit companies who are characterized by a double bottom line; i.e. financial and social return.
As Christians, however, we’d really like to see a triple bottom line: not only financial and social return, but also a spiritual return. These are companies that serve the world for Christ, meeting physical, financial, emotional, social and spiritual needs while making money for investors.
Do companies like that exist? Absolutely, and more are being created every day. These are companies founded and run by very smart and spiritually grounded Christians – companies like
Cloud Factory, an Indonesian company that employs small groups to do piecemeal data entry while providing spiritual support and encouragement to the workforce.
Sseko Designs employs young women in Uganda to make sandals, donating part of the financial profits to allow them to attend the local university, all in the name of Jesus.
Praxis Labs, a business accelerator, helping Christian entrepreneurs to “create cultural and social impact through entrepreneurship”.
So let’s assume we find a “triple bottom line company” that resonates with our passions, and we invest in them. Let’s further assume that they do well, and provide a nice financial return. Well, what do we do with that money – put it back into our bank account and spend it on ourselves? On the contrary, it’s our desire that the financial return be reinvested into more impact investments, thus creating a self-sustainable cycle of social and spiritual impact. Pretty cool, right?
We have now made two investments through Impact Foundation, and are about ready to follow those up with a third. These are essentially private equity investments with some inherent complexity, and the IF investment committee has provided some valuable insight as we evaluated the term sheets. In fact, they even suggested some simple changes in the final contract language that might protect our investment later. In order to make these investments, we moved money from our NCF donor advised fund into the IF donor advised fund, and IF managed the entire process. Overall, we could not be happier having the IF team as our partner in our personal impact investing portfolio.
Forbes Magazine has named impact investing the #1 trend in philanthropy for 2015 and 2016. But we wondered – is it really philanthropy if the money is invested rather than given away? It’s our belief that there will always be a need for pure philanthropy, but impact investing provides a responsible and sustainable alternative to love our neighbors for the long term with the potential of also growing our giving fund. We’re thrilled that Impact Foundation was formed to make what might sound like a complicated approach to serving the least of these into an accessible tool for all of us.