Q&A with “Realities of Impact Investing” Speaker Nancy Rosenzweig

NR_HeadshotNancy Rosenzweig is a Director at Big Path Capital and we are excited to have her as a guest speaker  for our 11/9 event, “Getting Real About Impact Investing: Stories from the Field.” We had a chance to catch up with her beforehand to get a sneak preview of some of the things she’ll be speaking to on the 9th.

The 11/9 event will feature TED-style talks on impact investing! Boston-area experts, including Nancy, will be sharing compelling stories about failures as well as successes in the space, speaking frankly about the challenges as well as the rewards.

What inspired you to pursue a career with positive social or environmental impact, and how did you get to your current position?

When I graduated from college I wanted to do work that would have a positive social impact. At the time, that meant going into human services or the nonprofit world. With a qualitative BA and the marketplace at the time, it was difficult to find a job in nonprofit work, so I decided to build skills working in the for-profit world to apply later to more mission oriented work. In the process I discovered the burgeoning world of socially responsible companies which offered the potential of even greater impact.

Over the years I have helped to scale many iconic social enterprise brands, building a career on the operational side. As a CEO, I raised money and managed mergers and acquisitions, while at the same time volunteering and serving on the boards of organizations like Root Capital and Trillium Asset Management. (Editor’s Note: Hey NIB Board Fellows, we’re looking at you!) Over time, I started to see a lot of excitement and innovation in impact in the financial sector. Last year I finally stepped fully into this sector and joined Big Path Capital, and I’m now able to work to support many purpose driven companies at once instead of only one.

What’s the most interesting/fun/challenging aspect of your job?

I am really passionate about helping these extraordinary companies that are making a huge difference in the world – helping them financially so they can continue to magnify their impact.  One place these mission driven companies have tripped up in the past is when they have had to take on capital from funders without alignment around values, investment thesis or time horizon. Through my work I am able to help these organizations grow while preserving their mission and values. It is exciting to be a part of it!

Can you give us a sneak peek of a challenge or failure you’ve experienced in the impact investing space that you may speak about on November 9th?

As I mentioned, one of the challenges in this space is that sometimes well-intentioned companies and funders have positive intentions but match up incorrectly. When a company is anxious for capital they may get together with the wrong funder and many times the relationship does not work out. Their goals aren’t truly aligned, or there are chemistry problems – both parties haven’t done adequate due diligence. In the end they neither optimize financial returns or the impact of their mission.

What is a trend in impact investing that you think will impact your career in the years to come?

There is definitely momentum, if you look at how much money is moving into impact investing and consider that there is now more demand from asset holders to make a bigger difference.

There is another trend of discussing and expecting market-based returns and not just concessionary returns. These concessionary returns exist and are fine, but the majority including the new Bain Capital Impact fund, are looking market-based returns on their impact investments, and believe they can actually get greater returns through these vehicles. These is trends are the wind at my back for what I do – match assets and capital with opportunities in direct, impactful investments with market based returns.

Another positive development is, the tax codes have changed. Now foundations can invest their corpus in impact vehicles without fear of tax consequences. In many cases the investable assets of these foundations are not aligned with their mission in fact they are often invested in companies contributing to the very social problems that the foundations were created to address. The goal was to maximize returns that could be donated for the mission. Now we understand they can potentially make much more impact with how they invest that corpus – and receive competitive returns. Investing those assets in impact vehicles is no longer prohibited as being too risky by tax code.

If you hadn’t ended up working in the impact investing field, where do you think you would have ended up instead?

I suppose I would have continued to operationalize impact for social enterprises, working on the front lines helping to scale and build companies.

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