Part of the growing local movement in the United States is an awareness that people can invest their dollars in ways that positively affect their communities, while also earning a return. Throughout this year, three Granite State institutions−Live Free & Start, the New Hampshire Charitable Foundation and the New Hampshire Community Loan Fund−are teaming up to present a series of forums called Impact Investing in New Hampshire. We asked one of the presenters, Community Loan Fund VP of Economic Opportunity, John Hamilton, about the series. You can visit the Live Free and Start website to see the schedule and register for one or more of the events.
John Hamilton ~ Community Loan Fund
1. Impact investing will be the topic of a number of forums around the state this year. What is impact investing?
Many people are familiar with “socially responsible investing,” which avoids investments in certain industries or activities that the investor finds objectionable.
Impact investing is a more intentional approach for the investor that seeks to support specific social or environmental outcomes—such as more good jobs in New Hampshire— and earn a financial return.
A common misconception is that impact investing doesn’t provide a positive financial return. However, recent reports and years of investments show that impact investors don’t have to sacrifice earnings.
So we’re excited to partner with Live Free and Start and the New Hampshire Charitable Foundation to bring this information to current and prospective investors across New Hampshire. We’re holding six Investing in NH forums in which each of the organizations will present various ways individuals can have a positive impact on the people and businesses of the Granite State through impact investments.
2. How important is this kind of investing to the state’s business ecosystem?
Impact investments can be more flexible, timely and risk-tolerant.
Flexible because impact investments often come from private sources–individuals and foundations–and without a lot of restrictions. They can deliver a range of types of capital (debt, sub debt, royalty and equity).
Timely because these investors can shape their capital to the needs of the business and react more quickly than traditional financing sources.
Risk-tolerant because some impact investors are willing to take greater risk if there is an opportunity for better returns, particularly if the investment would benefit New Hampshire’s people, communities and economy.
3. Can you give an example of where impact investors made a difference in New Hampshire?
In 2013, Rustic Crust, a natural pizza product company based in Pittsfield, needed growth capital to get its product into more grocery stores throughout North America. The Community Loan Fund had made a previous royalty investment and wanted to support this growth, but the company needed more financing than we could provide at the time.
Fortunately, we knew of an individual who was interested in co-investing with us. Together, we provided the needed capital, and Rustic Crust has since nearly doubled its number of full time jobs, while also increasing its part-time workforce.
This is particularly satisfying because a fire destroyed Rustic Crust’s production facility not long afterward. Yet because of strong management and community support, including from the company’s investor, Rustic Crust is thriving.
4. From the outside looking into New Hampshire: Will encouraging this form of investment draw more businesses or start-ups to the state?
We hope that the number and appetite of angel investors here encourage start-ups and businesses looking to relocate. There are definitely investors seeking out those kinds of opportunities.
And inasmuch as a goal of encouraging businesses to relocate or start here is to increase the number of good jobs, that goal aligns perfectly with those of many impact investors.
We know one of the motivations of some impact investors is to keep their money local. They enjoy financing projects they can drive past and feel the “I’m glad I put my money there” glow. There are many strong businesses already in New Hampshire, owned and run by our neighbors and friends, which are ready to grow and only lack the kind of flexible capital I described earlier.
5. Aside from attending one of the forums taking place throughout the state from now until the end of the year, is there a place where people can get more information or speak with someone?
The forums offer a rare chance to share the perspectives, experiences and opportunities offered by three organizations, so we hope that anyone interested in finding out what it means to be an impact investor will attend one of them. You can see the schedule and register here.
The next best option is to visit the web sites of the three participating organizations: Live Free and Start, New Hampshire Charitable Foundation and New Hampshire Community Loan Fund. You’ll find a range of local and regional opportunities. That’s a good thing−for the Granite State and for New Hampshire investors.
Tags: 5 Questions, impact investing, John Hamilton