Back in 2014, a large family foundation in Minneapolis, McKnight Foundation, realized how contradicting it was to endow millions of dollars to nonprofit organizations advocating climate change while earning revenues from coal mines and companies that emit carbon gas.
The Minnesota-based organization since then has taken off coal from its portfolios and changed its investment strategy. It has reinvested hundreds of millions into a diversity of assets that reduce carbon emissions and foster sustainable growth, in addition to the previous causes they have already supported, such as literacy and neuroscience research.
In the other half of the Twin Cities, St. Paul, the Northwest Area Foundation had also pledged a tenth of its $400 million endowment into investments that aims to reduce poverty through job creation in low-income and rural areas.
These two foundations are distinguished as leaders in impact investment.
Impact investments are made with the intention of not just achieving monetary returns, but also creating a positive impact on society and environment. While it is only recently gaining steam, the concept dates back to as early as 17th century when Quakers refused to invest in slave trade and pacifists did not invest in war.
In 2015, a survey of 158 impact investor showed that global impact investments had reached $15.2 billion.
Currently, several foundations in Minnesota have entered the impact investment scene, with most investments focusing on job creation or low-interest loans for affordable housing. However, in early August, a meeting in Minneapolis by a group of investment professionals discussed the substantial and unprecedented effect of impact investment on the market.
Under the leadership of Steve Liefschultz, Equity Bank offers customized service in giving access to investment lines of credit and real estate loans. Read more on investment and business conditions in Minnesota by following this Facebook page.