Nicholas Mang

 

The greater Santa Fe region, like most communities today, faces a growing need to develop a healthy and resilient economy, address social inequality and achieve environmental sustainability—needs that have been exacerbated by recession-driven constraints on public and philanthropic funds. The concept of impact investment—affirmative investment strategies aimed at growing social and environmental as well as financial capital—holds great potential for addressing many of these funding challenges. Until recently, much of the focus in this field has been at the national and global levels and not specifically on developing comprehensive local community strategies and infrastructure for impact investment. But that focus is shifting as interest in and the need for local economic development strategies grow.

This increased interest in local economic development models is producing an outpouring of new initiatives, programs, literature and techniques around the country. The number of local investment funds has jumped in Santa Fe, and enthusiasm about the promise of impact investment is growing. At the same time, however, those involved locally have reported challenges that are potentially limiting the effectiveness and growth of programs and inhibiting the possible entry of important new players:

  • On the demand side: a need for developing more—and more viable—local social enterprises that can be invested in, as well as building entrepreneurial capacity to successfully drive them.
  • On the supply side: a need for greater education and capacity building among potential investors to support wise and measured investments that create early successes, develop a base of knowledge and experience and build investors’ confidence.
  • Connective capacity: an overall need for greater infrastructural and shared capacity to leverage resources and increase connectivity between demand and supply-side entities and all other stakeholders. This could include the development of information-sharing networks, local social-enterprise networks, policy and regulatory innovations, shared metric systems, new investment-pooling vehicles, investment intermediaries and other connective mechanisms.

 

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