To stave off drastic climate change, we must invest more in nascent solutions ignored by traditional capital markets. Philanthropists are in a unique position to fund these efforts.
This pair of practice briefs from the MIT Innovation Initiative is intended to serve as a guide for investors, philanthropists, institutions, and entrepreneurs interested in using charitable capital to support early-stage, science-based innovation in for-profit enterprises. Charitable capital can be granted and/or invested into market-based solutions from several different philanthropic structures. One brief covers options available to those utilizing a private foundation to support innovation, while its companion brief covers options for those interested to use a Donor Advised Fund.
Mitigating climate change is going to require unlocking new sources of finance to fund the innovative technologies that will take us to a low – emissions future.
The gap between the lab and the field — between the work of scientific discovery and the achievement of social impact — has grown wider during the late 20th and early 21st centuries. So has the gap between philanthropic funding for university-based research and venture capital funding for the commercialization of products and services. But the emerging practice of philanthropic investment holds the potential to close this dual gap.
The Impact Finance Center, a partnership between the University of Denver and the Sustainable Endowments Institute, compiled a 3-minute video that summarizes the function and potential of program-related investments as a tool for private, corporate and community foundations.
The legal staff at the David and Lucile Packard Foundation, Bill & Melinda Gates Foundation, William and Flora Hewlett Foundation, and Gordon and Betty Moore Foundation joined together to develop a comprehensive training program for making program-related investments – freely accessible to all private foundations.
In early 2016, ImpactAlpha worked closely with the Gates Foundation to dissect its program-related investments. The SSIR published their findings in a series of articles linked here.
NYSERDA Climate Assessment Report
Early-stage investors require new, forward-looking metrics to improve investment decision making. PRIME partnered with NYSERDA and other leading experts in the philanthropy and climate finance community to develop a methodology for assessing the potential climate impact of a new innovation. This report summarizes the key findings of this climate impact assessment project.
This webinar explores a new, potential source of capital for energy technology innovation: charitable investments. Although charitable investments in energy technology companies are still in their infancy, this webinar examines program-related investments (PRIs) and other charitable financing tools that could help support early-stage energy technology entrepreneurs.
PRIME, Stanford’s Steyer-Taylor Center for Energy Policy & Finance, and the Mission Investors Exchange joined forces to describe the current landscape of investors and support organizations across the energy innovation and deployment pipeline. This paper describes the disjointed nature of energy impact investing in 2014 and how the federal government might catalyze increased and more coordinated investment activity.
In 2015, PRIME, Stanford’s Steyer-Taylor Center for Energy Policy & Finance, and Stanford’s Global Projects Center joined forces to propose an independent and aligned intermediary that would help long-term institutional investors identify the most promising companies and projects for global greenhouse gas reduction at scale.
Ceres’ primer for family offices that are interested in finance-first investing with awareness that climate change will influence market dynamics over the coming years.
By 2014, most philanthropists weren’t empowered to address the vast capital gap for early-stage energy innovation, nor given the tools they needed to use program-related investments as an important tool in their grantmaking toolbox to fill this gap.
By investing in clean energy, impact investors can become a powerful force for fighting climate change.