In June, the Second Vatican Impact Investing Conference, “Making the Year of Mercy a Year of Impact for the Poor,” co-hosted by the Pontifical Council for Justice and Peace and Catholic Relief Services, convened 170 attendees comprising global church leaders and experienced impact investors and social entrepreneurs.
Impact investing brings in private capital, acting as both supplements to and substitutes of charity and government funding, to support social enterprises for their benefits to the poor and marginalized and their ability to sustain themselves financially. Think of Newman’s Own, a food business that is both profitable and socially oriented as it deploys all profits to its social mission.
The infusion of private capital from institutions and individuals is critical as the scale, frequency, duration and intensity of global problems overwhelm the amount of charity and government dollars available. As such, we must bring in new energies, imagination and creative solutions.
Consider the question CRS often gets on twinning from U.S. parishes. The concern is that over decades of contribution to Haiti parishes, the latter have generally not made significant strides in self-sufficiency. As dedicated parishioners ponder their eventual exit, they worry about the continuation of this ministry.
With urgency, some explore ways for local communities to establish enterprises that can generate revenues and ultimately profits to improve their lives. It is the extension of giving fish, to teaching people to fish, to establishing the necessary resources for fishing to become a real livelihood option. Investments may be needed for boats or for a fish farm, processing equipment, cold storage or a truck to transport fishes to market.
The U.S. parish can provide dollars as a combination of donations, loans, loan guarantees or equity in the business. Such enterprise development is empowering, gives people dignity and stands on the Catholic social teaching of subsidiarity. Multiply the intentions and resources of one U.S. parish by some colossal multiple and we get $77 billion, which is the amount now invested in impact enterprises around the world.
Impact investing by Catholic institutions, though a small fraction of the global total, is growing.
Moving from negative screening that avoids businesses that contradict church teachings, exemplars like the Jesuits, Missionary Oblates of Mary Immaculate, Ascension Investment Management and the Sisters of the Holy Cross have taken the positive step of designating a certain percentage of their investments for impact funds.
While the social enterprise model is not appropriate for all social ministries of the church, there is a need to look for opportunities in order for the church to serve the mission of lifting the poor out of poverty in meaningful numbers. I am glad to observe budding examples and enthusiasm in this direction.
All of us can be more vigilant about our investment funds to assess the proportion used for impact funds. There are energetic debates on whether social benefits necessitate a lower financial return. The guiding question: What does a more just and peaceful society mean to us?
Pope Francis reminds us that “impact investors are those who are conscious of the existence of serious unjust situations, instances of profound social inequality and unacceptable conditions of poverty affecting communities and entire peoples.
“These investors turn to financial institutes that will use their resources to promote the economic and social development of these groups through investment funds aimed at satisfying basic needs associated with agriculture, access to water, adequate housing and reasonable prices, as well as with primary health care and educational services.
“Investments of this sort are meant to have positive social repercussions on local communities, such as the creation of jobs, access to energy, training and increased agricultural productivity” (Pope Francis, June 16, 2014).
Woo is president and CEO of Catholic Relief Services.