Collaboration is a buzz word that seems to be in the air in all fields –from business, to education to the arts – and the world of impact investing is no stranger to it. But what do we really mean when we start talking about collaboration in impact investing and what does it get us? At Wednesday’s breakout session at The Exchange 2018, presented by The Social Impact Exchange and Morgan Stanley, we heard from four industry experts on their personal journeys to find the value of collaboration, and what they believe real collaboration means and how to get to it.
WHY collaboration? Here’s what some experts say:
Martin Whittaker, CEO of JUST Capital, noted that people in the impact space are naturally collaborative and that collaboration helps leverage the work of a small company to “punch above your weight”.
Kesha Cash, GP, Impact America Fund, reminded us not to confuse size with power and for investors to consider the influence they can have by simply helping their investees get a seat at the table. By collaborating at many different levels, power can be transferred to smaller businesses in order to create a major change in the life of a low-income person who may be the beneficiary its work. In this way, investments in small companies can change lives immediately.
Lindsay Beck, Co-Founder and CO-CEO of NPX Advisors is exploring new ways to bring out the best of a collaborative effort between donors, investors and a non-profit delivering pre-determined impact targets. Investors in a new kind of impact security have to underwrite and accept the risk of the delivery of impact, and the donors have to be willing to advance on their commitment to contribute if impact is achieved.
Collaboration takes trust, clear communication of expectations and setting up “norms” for working together up front in order to avoid challenges and disagreements in the heat of decision making or declining operations. Have a framework in mind, set objectives and build something of scale. To succeed, everyone needs to be laser focused on a single vision, and for leaders, the “unnatural act” of letting go of their egos. Our results must be kept simple, tangible and measurable.
Dynamic systems require flexible, curious partners who seek significant interventions to change the status quo. The different perspectives of players can be a challenge to collaboration, or the ultimate benefit. Impact investors possess a willingness to take risks, while boards of directors have finite terms and want to see the impact of their investments. And organizations may need their capital for a longer term in order to create sustainable change. Rather than viewing these differences as conflicts, collaboration among stakeholders and other funders may allow a patchwork of solutions to be sewn into a powerful and strong path toward addressing social justice issues and providing the necessary capital for organizations to become self-sustaining.
Lily Trager, Director of Investing for Impact, Morgan Stanley, emphasized the power of investors telling their stories and sharing their successes. Unifying themes of an inclusive economy, environmental sustainability, and diversity provide a lens for investors to view and evaluate the impact of their capital.
In order to create true impact, we need the best in class focusing on global challenges across sectors to participate in an integrated design process to problem solve, and then lead. If we are able to follow our “north star” – a shared single vision –we must invest upfront in ensuring a common goal and an understanding of everyone’s role, power, and strengths. Leading by example and with humility, we will get their together.
– Rebecca Regan is Executive Vice President of the Housing Partnership Network (https://housingpartnership.net).