Investors who care about creating a positive impact for society have been stepping up to finance companies directly involved in addressing the coronavirus pandemic and to make sure others doing important work have the cash to keep going, according to ImpactAssets in Bethesda, Md.
By the end of the second quarter of 2020, investments made through the ImpactAssets donor advised fund, or DAF, will exceed $143 million, more than total investments made in the fund all of last year. Also, donors in the fund made more than 1,000 grants, totaling $11 million, from their DAFs in March, two times the number made in a normal March, the firm said.
The figures give a window into how the impact investing community—those who invest for a positive social or environmental outcome—are responding to expedite public health research and responses, as well as to support fledgling social enterprises and nonprofits during a devastating economic downturn.
“Impact investors are leaning in—they tend to do this in a crisis,” says Margret Trilli, president and chief investment officer at ImpactAssets.
Through the ImpactAssets DAF, investors donate a minimum of $5,000 in tax deductible funds. That money is in turn invested in impact-oriented funds as well as individual companies with financings of $25,000 to $90 million, depending on the size of the donor’s DAF and the investor’s wishes. Investors also make annual grants to nonprofits from the DAF.
In the midst of the Covid-19 pandemic, the firm’s investors also have been providing bridge loans to existing portfolio companies—to ensure they are sustained through the economic fallout of the crisis—as well as making new investments, Trilli says.
They are “completing deals on an accelerated scale,” she adds, often willing to be the “first close” on an investment round to make sure companies get a foothold to start their businesses. “They are the kinds of investors you want in your corner.”
Most impact investments now are directed to companies involved with biotechnology and human health. One large investment the firm is working on will fund a company that’s developing a Covid-19 vaccine, she says, although Trilli could not provide details on the investor, or the company.
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