Really. Join us on June 15 and 16 to learn more. A rare opportunity to hear from the national experts on the use of this tool to leverage community capital.

“Along with individual companies, small-time startup scenes outside of Silicon Valley are likely to reap rewards as well. Austin, Boston, and New York have had some success in building startup cultures, but they’ve been held back by the Bay Area’s grip on venture-capital money. Crowdfunding will allow companies without access to Sand Hill cash to find the capital they need online, perhaps spurring a wave of innovation among mom-and-pop startups whose ambitions are local rather than global. If that happens, the JOBS Act might end up creating some jobs after all.” (quotes from the April 6 Slate article)

If you need the JOBS Act basics,  the MSNBC post is helpful. Or, better still, read Jenny Kassan’s article on HuffingtonPost.

“The vast majority of the American public, the 99 percent of us who are “unaccredited” investors, will soon have the opportunity to keep their money local. The half of our economy made up of small, independent businesses will now have access to capital that previously could only go to giant public companies. Americans have $30 trillion dollars invested in securities — imagine if even 10 percent of that went from Wall Street to Main Street. What could $3 trillion dollars do in our communities?”

She is admittedly, still “cautiously optimistic.” If you want the flip side of the act by those who are seriously upset about what the law ALSO allows, look here:  Rolling Stone and Bloomberg.

I’m most interested in the ecosystem growth this Act will offer up to us. This Act is really an invitation. It invites those of us advocating for local and sustainable businesses to make this work broadly, sharing knowledge and taking advantage of the opportunities wisely. Michael Shuman sums it up nicely,” I believe that local economy advocates now must start educating the public about the importance of favoring local investment.  Our argument should be that knowing the business in which one invests – knowing the products, the entrepreneur, the workforce, etc. – is the best way to prevent fraud.”

Hatch: A Community Innovation Lab, and other ecosystem cultivators, should look closely at their new role in getting the word out, and acting as sources of information and direction.

Here is a quote from the article, “Before exploring their differences, it’s helpful to recognize that PULSE, GIIRS and IRIS have a shared goal: To increase the flow of capital to investments that solve social and environmental problems while generating a financial return. Each solution, however, plays a unique role.” 

One question I often raise is what do you mean by impact?  This states it pretty well–”…investments (to enterprises of all kinds) that solve social and environmental problems…” It is about mission-driven entities. Opportunities to promote their efforts and therefore their impact, through investing in them via loans or equity, is what impact investing is all about. (For more about social finance listen to RSF’s new podcast.)

Impact investing seems simple, and an obvious win-win. Why is it so difficult?

One issue that continues to surface, especially through nonprofit consultants in marketing, is the “sell” to likely donors. (And, as we merge the worlds of donating and investing into this new impact investing world, this will matter.)There are two reasons, they tell you, that people contribute: They either gain personally or they are moved–the more tears the better. You must tug (yank) on their heartstrings. You need a good story!

I know I know. It’s true. People need stories to make situations real. But, as long as we want our hearts tugged and the feeling of a tear or two trickling out, we will never ask the meaningful questions that would transform the field of nonprofits and social enterprise alike. (And I don’t mean overhead. That debate should be over, thanks to Dan Pallotta and his book Uncharitable.) I mean “What are your impact metrics and how well do you reach them?

First, we could use some common language. Standardization is the promary objective of the Impact Reporting and Investment Standards (IRIS). This is a critical first step towards comparing impact results and entities, as well as their strategies, which in turn inform and improve practice. Next, you want to track these data across your portfolio. PULSE is a data management tool for fund managers and organizations to do just that. Read through these sites, and the article cited above, and get familiar with these resources. This is the small stone in a pool pushing out ripples far and wide.

The problem is, (if I can call it a problem), is that these tools are primarily for “the impact investing industry” not really for joe and josephine local investor or donor. I’m glad big institutional investors have these new tools to improve their impact, but they’re big guns with big targets. As we move into the realm of becoming local investors, with some of the same questions and needs, we are going to be searching for ways to validate our due diligence assumptions, get advice and feedback, and better grow the local impact investing industry.

This is where it gets exciting. This arena is wide open. There are no local investment advisors for nonaccredited investors. The JOBS act will transform and grow these opportunities and tools.

There is more to come on this topic. Join me at the SBO Forum tonight, and let’s talk.