In the following Investing in Results op-ed, Mackenzie Clark marks the one year anniversary of the Federal Reserve Bank of San Francisco and Nonprofit Finance Fund New York City launch event for “What Matters: Investing in Results to Build Strong, Vibrant Communities” with a piece on investing for more effective problem-solving. From the op-ed:
“Many of today’s prevailing methods of financial measurement and assessment do not enable social justice organizations to deliver outcomes effectively. Often restricted by short-termism, siloed operations, inflexible allocations, and a prescriptive social environment, their ability to target the root causes of social inequity is greatly inhibited. Philanthropy and investment must innovate to find ways to use existing funding to facilitate system-enhancing outcomes so that these organizations can generate effective and long-term results.
“Fortunately, the investment community is taking steps towards achieving the shift from outputs to outcomes. Investors are beginning to accept the possibility that this investment approach may mean the return period is harder to predict than under an output-oriented scheme. In addition, our research at TIIP shows how institutional investors are adopting ways to invest that look beyond the returns of their portfolios today to consider tomorrow’s impact on the health of the interconnected societal, environmental, and financial systems in which they operate.”
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