Vatican Symposium Explores Impact Investing’s Role in Fostering Inclusive Economics

June 17, 2014

The Investing for the Poor Conference concluded Tuesday on the themes of social inclusion, collaboration, and discernment.  Participants, who were drawn from business, finance, academic, humanitarian, and faith-based communities, spent the last two days discussing how impact investing can address the needs of he world’s poor and foster inclusive economics.

Omidyar Network’s Matt Bannick and Sal Giambanco shared our organization’s perspective that strategic grant-giving and market-based philanthropy are complementary.   Investments and business are traditionally viewed as purely profit-seeking; yet if harnessed properly, business is the greatest force for lifting individuals out of poverty.   Profits driven by customers who receive value foster a business' sustainability and fuel the scale necessary to reach the billions of people who are in need. 

The event, which was held just outside the Vatican, was convened by Catholic Relief Services, the Mendoza College of Business at the University of Notre Dame, and the Pontifical Council for Justice and Peace. 

CRS’s Paul Eagle offered the following highlights from the concluding day:

Dr. Carolyn Woo, President and CEO, Catholic Relief Services, began the day by providing an overview of day one highlights. She discussed the importance of measurement, details and the new framework we must work in to properly design and execute a successful Impact Investment program.  Woo also described the important role as a moral authority the Church needs to play moving forward.

Sr. Helen J. Alford, O.P., Dean of the Faculty of Social Sciences at The Pontifical University of Saint Thomas Aquinas (the Angelicum), helped to shed light on Impact Investing in the Light of Evangelii Gaudium.  She explained that “the Church needs impact investors to be reliable, concrete and relevant,” and added “This is not a new issue—it’s old, it’s part of bigger movement—creating money and creating social good at the same time.”  Religiously inspired investors among religious communities such as the Methodists and Quakers were among the first to employ social benefit as a criteria in investing. Turning to Pope Francis’ Apostolic Exhortation, according to Evangelii Gaudium, the number one priority of our mission should be social inclusion. Pope Francis has talked about how exclusion is one of society’s biggest problems. 

Sean Callahan, Chief Operating Officer, Catholic Relief Services, led a panel on Sectoral Needs and Opportunities.  He made it clear that it’s not a question of whether we do these things—but when and how we do these things and added that we all must align in the same direction. Shaun Ferris, Director of Agriculture Programming, Catholic Relief Services, described agricultural livelihoods in Latin America and CRS’ Path to Prosperity model, moving beneficiaries from the status of Recovery (highly vulnerable); to Building (vulnerable, yet viable); to Growing (entrepreneurial  and thriving); Tom McPartland, CEO, ELMA Philanthropies Services, described some very successful Impact Investing programs for healthcare in Africa; and Paul Polak, Founder and CEO of Windhorse International, presented several case studies about his success designing water programs in India.

Dr. Mirza Jahani, CEO, Aga Khan Foundation U.S.A, ran a session about Blending Philanthropy and Impact Investments in a Faith-Based Model. He explained the goal of the organization: to improve quality of life through local, permanent institutional development and added that the key to his organization’s success has been in building institutions that take a long-term approach to addressing social issues.  These include banks in Afghanistan, a university in central Asia, a park service in Nairobi, Kenya, and a hospital in Karachi, Pakistan, among others.

Matt Bannick and Sal Giambanco from the Omidyar Network described the important collaboration that must take place between for-profit and non-profit communities.  We all have shared interest here.  We care deeply about disadvantaged and the poor and our core values very much aligned with Pope Francis and other universal principles. This begins with respect and ends with humility. They added that the three fundamental keys to profit investment are value, self-sustainability and massive scale.

Terry Mollner, Board Member, Calvert Family of Socially Responsible Investment Funds, presented on Emergence of Investing for Good, and Ernest von Freyberg,President of the Holy See’s Institute for Works of Religion, provided Vatican Bank perspective on Impact Investing.  According to Freyberg, the Catholic Church is well positioned to engage with Impact Investing. It has an impact vocation in promoting the dignity of the human person. It has great service providers in its global ministries in health care, education and social services. And the church has great potential impact investors: the Catholic Church in Europe and North America built up tremendous wealth in the 19th and 20th centuries, and as its institutions shrink, church groups are looking to put this patrimony to use.

Mark Palmer, Chief Financial Officer, Catholic Relief Services, moderated a panel about the outlook of Catholic institutional investors and introduced Steve Schott, CapTrust Advisors and Jimmy Ryan from Merrill Lynch/Bank of America. According to Schott, “There is an appetite among my clients to learn more about Impact Investing.”  Ryan explained that none of his clients are engaged in Impact Investing yet because he has not heard enough about the options available for his clients.  He added it will be important for everyone to become educated on this topic.

Andreas Widmer, Director of Entrepreneurship Programs at The Catholic University of America and President of The Carpenter's Fund, suggested that there should be very different teams for humanitarian aid vs. economic development, just as in a counseling relationship there are different providers who handle crisis and long-term counseling, so we don’t fall into the co-dependency trap. He explained that we need to find the best entrepreneurs on the ground in the countries to be role models.  He ended by saying the root of evil in companies does not come from the system but resides in individuals making bad decisions. We need to hold our business community to a higher standard and live our Christianity seven days a week, not just on Sunday. Because as Pope Francis has said, business is a noble vocation.

Dr. Patricia Dinneen, Chair, Impact Investing Council, Emerging Markets Private Equity Association, said that the conference had achieved its three objectives: Shared learning, Networking, and Discernment

His Eminence, Cardinal Peter K. A. Turkson, President of the Pontifical Council for Justice and Peace, closed meeting by saying “everything we have done here is a way of responding to the Pope’s call for inclusive economics for the common good. In a very real way our discussion here on Impact Investing is a way of also addressing how we can make market-based business reach out to fashion an inclusive system of economics.” He added that we need to have a strong strategy and competent people on the ground to execute, and he sees CRS as playing a mediating role. The most immediate task is to present all that has been discussed during this conference to the local churches and the local bishops.

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