St. Louis Fed Releases Report on Impact Investing in Missouri

ST. LOUIS – More than 70 percent of active individual investors are interested in the nonfinancial, or social, return on their investments, according to a recent survey conducted by Morgan Stanley. In addition, foundations, community development financial institutions (CDFIs) and others are increasingly financing social enterprises across the U.S., contributing to mission sustainability and building organizational capacity.

The Community Development department of the Federal Reserve Bank of St. Louis is interested in better understanding the current landscape and future potential for nonprofit organizations in Missouri to utilize impact investment—borrowed or invested funds that must be repaid—to advance their missions.

To this end, in January 2017, the St. Louis Fed partnered with Nonprofit Missouri, the Gateway Center for Giving and the Network for Strong Communities to survey nonprofit leaders throughout the state to learn more about their interest in social entrepreneurial activities, their need for outside capital to finance such activities and their ability to receive impact investment capital. By having a baseline of data regarding nonprofit interest in social entrepreneurship and the organizations’ capacity to absorb impact finance capital, practitioners now have critical information that can lead to building an impact investing ecosystem in Missouri.

More than 130 nonprofit leaders responded to the survey, and the results are now available online in the St. Louis Fed’s Community Development section.

The results provided insight into how many organizations have pursued financing in the past; where and what type of financing was pursued; financing needs for the next year; how many nonprofits are currently generating earned income through the sale of goods and/or services, and how many are potentially interested in doing so in the future. Insights were also gained into reasons why nonprofits may be hesitant to generate earned income through offering or scaling new goods and/or services for sale, as well as what kinds of support would help these organizations successfully implement social entrepreneurial activities.