Foundations Urged to Utilize Return-Seeking Investments as Part of Their Impact Strategy

In a paper released today, three experienced investors suggest that recent changes make it possible to produce a substantial impact and achieve market rate returns.
Learning Returns: Impact Investing at the Education Turning Point, is the first paper in a series focused on accelerating and improving the shift to personal digital learning.
According to the authors, “The education turning point demands that innovators imagine high quality, scalable student-centered models which provide the conditions for educating large populations — and compels institutions and individuals to invest and create policies to support sustained education innovation.”
The three co-authors, who are fund managers and entrepreneurs, argue that we’re at an education turning point.
The authors note, “The growth of media and communications technology, the rise of a new generation of students and teachers equipped to use technology, and the shifts within schools and educational systems themselves create new fertile ground for education innovation.” The changes are highlighted as three main shifts in education; the Technology Shift, the Global Shift, and the Learning Shift.
In the paper they suggest that it is now possible to achieve market rate returns and large scale social impact.  They also believe investing in mission-driven private enterprises is an important complement to philanthropic efforts.
The authors urge foundations to consider investment in return seeking vehicles as Program Related Investments or from their endowment.  Five recommendations for foundations are made:

  1. Embrace entrepreneurship: stay flexible, support entrepreneurs taking new approaches.
  2. Start the change from within: foundation program staff should interact with the investment staff–they can learn from each other.
  3. Learn and leverage: connect with other impact investors and work with experienced fund managers.
  4. Advance the sector: advocate for innovation, rational procurement, and effective preparation.
  5. Evolve your strategy: commit to long term goals but stay flexible, learn, and stick with it.

Along with the paper release, co-author Tom Vander Ark will address a distinguished and mission-driven audience Monday morning at the Partnering for Global Impact Conference in Lugano, Switzerland.
In addition to discussing the paper, Vander Ark will also highlight the potential, in this decade, to offer every young person a quality secondary education utilizing inexpensive access devices, open content, and efficient blended learning models.

Caroline Vander Ark

Caroline is President of Getting Smart.

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