Five of the most effective things an impact investor can do in a time of crisis

While impact investors are typically focused on a longer-term outlook, it’s impossible amid a global coronavirus pandemic not to look at the very immediate, short-term needs around the world, and how the drastic changes caused by the fallout will reshape the global economy.

Disruptions to daily operations have impacted companies and people across every sector, many of whom will struggle to come out of the other side, even with trillions of dollars in stimulus in the pipeline. So what is the most effective thing an impact investor can do in a time of crisis?

A number of researchers have set out to answer this question, including Cathy Clark, the faculty director at Duke University’s Center for Advancing Social Entrepreneurship. “We saw that a lot of businesses were being asked to shut down in the U.S. and around the world, so we started looking around to say, ‘What are the resources available to these enterprises?’” she explained in an interview with Impact Entrepreneur’s Laurie Lane-Zucker. 

Clark, along with other field researchers, created a resource database for impact investors and foundations for social entrepreneurs. That list now includes over $300 billion in capital relief. SOCAP, the host organization of the annual flagship social enterprise conference, has also compiled a resource list

Globally, the value of assets under management tied to social, economic, and environmental impact has reached $500 billion. This is according to a 2019 estimate by the Global Impact Investing Network, a membership organization of individuals and firms engaged in impact investing. 

The volume of the resources mobilized is impressive, and a nice reminder that a terrible crisis can bring out the best in humanity. But beyond the corporate grant-based funds and the government relief programs, there is such a kaleidoscope of ways to offer support to just about every type of social enterprise that I think there is something here for every type of investor.

Below, I’ve listed five of my favorite resources from the lists to inspire you to continue finding ways to make a difference at this volatile moment.

  1. Social enterprises for social enterprises. Plenty of impact investors are offering bridge loans and venture debt to social enterprises hit hard by the virus or working to respond to it. But social enterprises themselves are also making investments. Rethink Food in NYC, which uses and reduces excess food from the city’s restaurants, has set up a Restaurant Response Program to help restaurants stay afloat by temporarily becoming an extension of their model. Wefunder, a crowdsourced-investment platform that is also a public benefit corporation, launched an accelerator for social entrepreneurs working on COVID-19 responses. 
  2. A “Circle of Aunts and Uncles.” Funds to support bartenders, local actors, and other people without a traditional safety net have sprung up around the world. But in Philadelphia, one group is taking it a step further, calling themselves Circle of Aunts and Uncles and offering low-interest microloans to under-resourced entrepreneurs. The name comes from the social capital that a well-connected relative might provide.  
  3. Unexpected Celebrity Investors. One might expect celebrities-turned-investors like Ashton Kutcher or Leonardo DiCaprio to get in on the coronavirus response. What is less expected is grants and loans from the Tegan & Sara Foundation — run by the Canadian folk music duo — or the fund for creatives and innovators established in honor of Star Trek creator Gene Roddenberry. Tegan & Sara are offering rapid-response grants to projects and organizations serving the LGBTQ+ communities in the US & Canada, while the Roddenberry Fund is offering $1M in prizes to innovators with solutions to the pandemic’s repercussions.  
  4. Focus on Fact-Checking. Misinformation about the coronavirus is spreading almost as quickly as the disease itself. Facebook is partnering with the International Fact Checking Association (yes, that’s a real organization) to fund fact-checkers at media organizations around the world. 
  5. Got an app for that? Some investors are just asking for good ideas. Funders like Omidyar Network India are asking for tech-based solutions to tracking the virus and mobilizing the public. Meanwhile, the former president of Y Combinator, Sam Altman, is asking any startup that can rapidly produce masks and/or ventilators to email him about an investment — which could be up to $50M.