Good morning and hello from Cape Town! It’s the second Saturday of the month, so that means it’s time for the Impact Esq.
I’ve been getting some great feedback from the first volume. Just a note, if you have anything that you’d like feature (deals you worked on, blogs, events, etc.) just shoot me an email. Looking forward to featuring your work in the impact space. Cheers!
Kickstarter’s Benefit Report. Every benefit corporation is required to produce a benefit report which details its social / environmental impact. I’ve been writing and reading these reports since the benefit corporation first launched, and I’ve never seen one as strong as Kickstarter’s. Some highlights include: 1. As of December 31, 2016, our team was majority women (53%), as was 61% of our Senior Team and half of our Executive Team. 2. Our CEO’s total compensation in 2016 was 5.52x the median comp of all non-CEO, non-founder employees in 2016. 3. Kickstarter projects have employed 283,000 part-time collaborators in bringing creative projects to life, created 8,800 new companies and nonprofits, 29,600 full-time jobs, and generated more than $5.3 billion in direct economic impact for those creators and their communities. Beyond the numbers, the design is beautiful – specifically how they clearly tie the specific public benefits to measurable impact in a very user-friendly way. Great work by GC Michal Rosenn. We could all learn from their example. See for yourself at Kickstarter (7 minutes).
Looking for a Ride at SXSW? Following a bruising political battle, Uber and Lyft pulled out of Austin, Texas, making room for new forms of ride-sharing. RideAustin’s nonprofit model is a unique attempt to use an alternative legal structure to bridge the divide between Austin’s tech community and the residents who had repudiated Lyft and Uber at the polls. It’s a very different type of ride-hailing service. The company allows passengers to round up their fares to the nearest dollar, donating the extra to a local charity (RideAustin has raised over $100,000 for charities so far), and users can opt in to surge pricing to get to the head of the queue and ensure that their drivers are properly compensated. Learn more at MIT Technology Review (6 minutes).
Nonprofits Investing in Social Impact Funds. From an investor perspective, one concern that frequently arises for nonprofits seeking to invest in social impact funds is that the underlying investments of the fund, if structured as a partnership or LLC, may cause the nonprofit’s activities to be characterized by the business of the underlying investment, thereby raising the risk of unrelated business income tax (UBIT). The most typical approach to solving this issue is by inserting a corporate blocker in between the nonprofit entity and the underlying investment partnership or LLC. Some social impact funds that expect to raise a significant portion of their capital from nonprofit entities and anticipate investing largely in partnerships or LLCs may go a step further by structuring the fund as a corporation rather than a limited partnership from the outset in order to alleviate this concern from multiple investors. Learn more at Mofo Impact (3 minutes).
Morgan Stanley & Impact Investing. Sustainably invested assets (broadly defined) now account for more than one out of every five dollars under professional management in the U.S. Last week Morgan Stanley Wealth Management announced the launch of two sustainable investing model portfolios with reduced account minimums of $10,000 on its Investing with Impact platform. These new portfolios — Investing with Impact Access Balanced and Investing with Impact Access Equity – will provide investors with diversified goal-specific solutions to help align financial goals with personal values. It’s interesting to see how traditional banks are attempting to play in the impact space. Learn more at Morgan Stanley (4 minutes).
ESELA Conference. If you happen to be in Brussels (or want a good excuse to go) on April 28th, you won’t want to miss the European Social Enterprise Law Association Annual Conference will be taking place this year on 28 April in Brussels on the theme of ‘Teaming Up in the Middle: How Business and Not for Profits Jointly Create Social Impact’. The European Commission will be providing an update on its legal policies and plans for social enterprise, and there will be discussion on international development, the welfare state, social impact bonds, alternative finance and social funds. Learn more here.
Impact Esq is a monthly email summarizing the best articles on social enterprise and impact investing law edited by Kyle Westaway – author of Profit & Purpose and Managing Partner of Westaway Thanks for being a member of the Impact Esq community. I truly enjoy curating this email every month and love hearing your thoughtful insights. Feel free to shoot me an email with any feedback or suggestions. If you like what you’re reading, I’d be honored if you share it with other social impact attorneys. Have a restful and thoughtful weekend.
Playing with twisty puzzles is the best way of improving your dexterity and problem solving skills.