Overview

Occupying the space between traditional philanthropic giving and traditional market-rate investing, impact-first investments (IFIs) prioritize a desired impact on society or the environment while still generating returns that are typically, but not necessarily, below risk-adjusted market rates. Unlike a one-time grant or donation, IFIs earn a return that can be recycled for use in future projects while catalyzing high-impact initiatives that are unable to attract market-rate capital due to their risk levels or return profiles.

Developed by the Rustandy Center for Social Sector Innovation at the University of Chicago Booth School of Business and the Social Finance Institute, the Impact-First Investing Tool (IFI Tool) is an interactive model designed to help philanthropic investors and others understand and explore how impact-first investments might affect both their total impact and financial returns over time.

The IFI Tool is not designed for making precise portfolio allocations; rather, it presents a simple model that allows users to see the financial and social impact implications over time of different assumptions about impact-first investment opportunities. It also includes case studies with examples of different types of IFIs — from equity funds to below-market-rate loan funds to recoverable grants and more.

Special thanks to Builders Vision for their support of this project.

To learn more, contact us.

IFITool.org