Social good and profit can go hand-in-hand. By leveraging Impact Investing strategies, philanthropy and market-based solutions work together to address our region’s most pressing social challenges.
The San Diego Foundation is committed to adopting new, innovative philanthropic strategies like Impact Investing to add to our portfolio of services to provide value to our donors and social impact for community.
What is Impact Investing?
Impact Investing is the practice of investing into funds, organizations and companies with the intention of generating measurable social and environmental impact alongside a financial return. Benefits include supporting sustainable community development; recycling philanthropic dollars back into the community to address community needs, mitigating investment risk and maximizing impact.
Impact investors include foundations, health systems, banks, pension funds, insurance companies, faith-based organizations, corporations, wealth managers and individuals.
How Can I Participate?
After researching community need, identifying opportunities to leverage funding, and educating donors about how Impact Investing works, we have established four fund opportunities for donors of The San Diego Foundation:
- Program Related Investment (PRI)/Low Interest Loan Fund
A revolving loan fund will primarily focus on taking out high interest rate loans to reduce debt service for impactful nonprofit organizations serving community needs. Interest rates are expected to be below 3%. Returns will be reinvested in the Fund.
- Program Related Investment (PRI)/Project Specific Fund
A fund providing loan support for nonprofit community needs such as land acquisition and capital projects. Returns will be reinvested in the Fund.
- Pay For Success (PFS)
Established to encourage city, county and other municipality participation in social financing. Often a mechanism that requires funds to match federal or state funding, or working capital. Returns (typically in the form of return of match/working capital plus a percentage of savings) will be reinvested in the Fund.
- Impact Investing Evaluation Fund
A grant fund designated to evaluate each fund’s financial and social returns, and the Impact Investing program overall. Grants are made to objective, third party evaluators.
Frequently Asked Questions
Is there a minimum amount to contribute to a fund?
We are seeking investments of $100,000 or more to ultimately raise fund balances between $5 million to $10 million.
Will investors vote on how the funds are deployed?
Investors will not vote on fund deployment, but will be engaged throughout the program timeline with updates, presentations, site visits and evaluation of the impact.
Are investments returned when loans are repaid/PFS funds are returned?
No. Loans are self-perpetuating, so funds are recycled to provide opportunities to assist with future debt reduction needs and community specific programs.
Will my investment be recognized the same way as a gift/grant?
If funding goals are not met for programs, will you return my investment to my fund?
Yes, funds are transferred only when funding goals are achieved.
How do I propose a program to be considered for funding?
We are currently defining a formal intake process so investors can share their proposals.