You've heard of angel investing, venture capital and crowdfunding, but what about impact investing?
GoATL Fund, an impact investment fund developed by the Community Foundation for Greater Atlanta, is one of the first of its kind in the city, supplying funds to non-profits and socially conscious companies through flexible, cost-effective loans.
An impact investment fund, according to Mark Crosswell, managing director of social impact strategy for the Community Foundation, is designed to support long-term sustainability of programs and solutions that address a region's challenges and opportunities. With the impact fund, investors hope to generate social outcomes and financial returns by scaling and sustaining non-profits and for-profit companies with a social purpose.
In a recent Georgia Social Impact Ecosystem Report, 78 percent of organizations, entities and companies participating in the study claimed to have "significant interest" in increasing knowledge about impact investing.
"Our fund is the first impact investment fund in Georgia," Crosswell said. "It’s focused on social outcomes and one of our most important priorities is use our money to leverage other money, so we believe the dollars we invest will often attract other dollars, we see that already in the one investment we’ve made and we think we’ll see that in the second investment, but that’s a very important factor as we think about the broader ecosystem of impact investing."
Launched earlier this year, the fund recently secured its second investment---$500,000 to Access to Capital for Entrepreneurs (ACE), an Atlanta-based nonprofit which provides loans and business advisory services to underserved entrepreneurs in order to finance the growth of small businesses. The funding will go toward ACE's SBA Community Advantage Program, which leverages SBA loans to minority and immigrant business owners in Atlanta to purchase equipment, hire employees and finance working capital.
"The GoATL fund that we launched in January of this year is our inaugural effort to bring impact capital into the philanthropic community," he said. "So GoATL is a financial debt fund designed to support nonprofits and social enterprise that operate in the same five impact areas that are grant program support, which are the arts, education, community development, wellbeing and non-profits."
So long as a company falls within one of those five categories and caters to the metro-Atlanta area, the GoATL fund has an opportunity to help secure capital, Crosswell said.
"We are agnostic to legal structure or size, but typically our investee needs to be of a certain capacity and size to reach the scale and sustainability we expect them to reach," he said. "In other words startups would probably not be appropriate, but we would be looking to support new initiatives."
Organizations and companies with social solutions in the South typically are deficient of capital, Crosswell said. The GoATL Fund provides opportunities for the hybrid for-profit business with non-profit solutions that investors of traditional non-profits might overlook, he said.
"We’ve been in an environment where low income and poverty were up for a decade without a lot of movement and we’re starting to see now there are some business models taking advantage of business concepts for good," he said.
