September 12, 2012

Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry

Interest and activity in impact investing has grown significantly over the last four years, and has resulted in many important milestones.  The term itself was convened at a series of meetings hosted by the Rockefeller Foundation in 2007, which also led to the Foundation’s major initiative to catalyze the impact investment sector. The report by the Monitor Institute in 2009 provided a blueprint for how the industry could evolve as it moved from a phase of ‘uncoordinated innovation’ to one of ‘marketplace building’. Since then, interest and activity has grown significantly, despite (or perhaps because of) the prolonged economic downturn.

Where are we today, and what’s next in building impact investing worldwide?  Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry, was just released by the Rockefeller Foundation.  The report reviews early successes, current trends, and anticipated challenges, and situates them within the broader evolution of the sector and its key actors. We examine progress over the past four years in terms of six dimensions crucial to building the impact investing industry: unlocking capital, placing and managing capital, demand for capital, assessing impact, creating an enabling environment and building leadership.

Perhaps not surprisingly, we’ve found that many good things have happened. The past four years of industry building in impact investing have been dynamic, creative and, above all, productive. More impact capital has been mobilized, more organizations are actively engaged, and more deals are being completed. In the report, we describe the tangible gains in the mobilizing of capital for impact investments by a growing number of players, the range of activity that has resulted in the creation of innovative products and platforms, and increasing activity on the demand side.

In spite of this impressive progress, however, impact investing still faces a range of challenges and complexities as the field evolves. There still is much to be done, especially to build industry networks in emerging markets and to strengthen capacity on the demand side.  But it is clear that the industry is shifting from a period focused on organizing itself and establishing initial infrastructure to one much more clearly focused on implementation. Indeed, leaders whom we interviewed and other champions of the field more frequently speak of the need to move into an “era of execution.”

To this, we would add: an era of acceleration and execution. We put forward 15 practical recommendations on what we think needs to happen now.  We have had the privilege of learning from the experience and insights of over 100 leaders in impact investing from 11 countries.  Looking ahead, there is both a need and an opportunity for industry leaders to join together to catalyze a powerful further acceleration—a surge in the rate of growth—across a wider range of dimensions, in order for the field to reach maturity, scale and sustainability.

Do you agree with our interpretation of where the key trends, issues, and opportunities are? What do you think are the priorities for building this dynamic field?  What obstacles must still be removed?  And how can the field deliver on its potential while managing expectations that may be placed on it?

Download The Full Report

Download the Executive Summary