Harnessing Strategic Philanthropy To Optimize Impact Investing
We believe that under-resourced sectors require a full ecosystem to thrive. Often this is not a problem which market forces will organically address, which is why subscribe to a blended finance approach which deploys philanthropy and investment capital towards a unified goal, albeit with differing targeted outcomes and impact.
More than an entrepreneurial ecosystem…
For entrepreneurs the top three challenges everywhere are access to talent, excessive bureaucracy, and scarce early stage capital.
When these three challenges can be overcome an entrepreneurial ecosystem can thrive, however this only applies in sectors where healthy market forces exist. Unfortunately, this is not the case in many areas of society where the potential for social impact is immense but the financial returns are humbler.
Arc Impact was founded to address the mismatch between potential and actual impact.
At Arc, we acknowledge that despite the progress of data driven decision making in philanthropy it remains an area driven by emotion. We also acknowledge that despite the genuine desire for socially responsible capital management, it remains an area driven by risk adjusted returns.
By acknowledging these two truths we don’t attempt to camouflage our philanthropy as investments nor our investments as altruistic, rather we harness the force of both drivers towards a unified goal.
How do we achieve this?
Impact investing is perpetually stuck in the act of balancing financial returns with social impact, while philanthropy seeks an operating model which allows its cumbersome benevolence to harness market forces without strangling them. At Arc we approach this differently, we set the true North to provide directional guidance for both our philanthropic and commercial investments, allowing each capital to address the issues for which it is best suited. Therefore, we deploy philanthropy to build the ecosystem, and once it is up and running, we deploy investments to grow the ecosystem.
This approach allows us to promise and deliver to our various stakeholders across the philanthropy-investment continuum.