Investing for impact

Jamie Hayward is in the wheelhouse of the “Isabelle Nicole” when his phone rings. He listens, and nods, and says “count me in.”

Hayward tends 800 lobster traps from this boat, and also runs the gill-netter “Heidi Elizabeth.” His industry has seen desperate times, and small-boat operators have been hit hard.

Hayward has counted himself in to a project testing a new net that he helped to design – one that he hopes will allow fishermen to better target species they are allowed to catch more of and avoid those (like Atlantic Cod) that are subject to tight restrictions.

The project is part of The Nature Conservancy’s efforts, in collaboration with local fishermen and the University of New Hampshire, to improve ecological health and restore declining fisheries in the Gulf of Maine.

Through its new Impact Investment Fund, the Foundation has made a $250,000 loan to help TNC expand that initiative.

“Impact investments put more resources to work in the community, generating social and environmental benefits while also earning a financial return,” said Foundation Chief Financial Officer Michael Wilson. “This is a great example of what impact investing is all about.

“The Foundation is able to make this large-scale investment in TNC that improves the health of the Gulf of Maine and helps the local fishing industry – while also making more charitable dollars available for important work in New Hampshire.”

The Foundation’s Impact Investment Fund was launched this year, with initial capital of $3 million.

The program uses a portion of the Foundation’s invested capital (endowment) for investments – not grant dollars. Donors can direct all or some portion of their funds at the Foundation to be placed in this new investment pool. Those funds are then invested in projects that create jobs, protect the environment and spread opportunity in New Hampshire and the region – while earning a return that can be used for current or future grantmaking.

The Foundation’s dedicated Impact Investment Fund is new, but the strategy is tested. The Foundation has a history of such investments – dating to loans in the 1970s that helped preserve Historic Harrisville and loans to the New Hampshire Community Loan Fund since 2002.

A five-year, $2-million loan to the Community Loan Fund, renewed in 2014, helped the residents of a manufactured-home community in Laconia and Belmont establish a cooperative and purchase the land under their homes. It helped preserve 75 affordable apartments for elders in Antrim and Lincoln. It helped Rustic Crust, which employs 60 full-time workers in Pittsfield, expand to sell its product nationwide – and rebuild after a devastating fire. And it helped Great Bay Kids Company Inc., a nonprofit that operates early childhood centers on the Seacoast, build a new facility in Exeter to care for up to 143 kids, including infants and toddlers.

The access to capital, said Community Loan Fund President Julie Eades, “helps people do something for themselves that wouldn’t happen through the mainstream financial systems. A lot of these [projects] require capital in a timely way. We’ve got to have the money when the project needs it. So having that steady support from the Foundation really makes a difference.”

And the Foundation committed $500,000 in 2013 to invest in the Granite Fund, a venture capital fund of Borealis Ventures, to create and maintain good jobs in New Hampshire and encourage the growth of the high-tech and biomedical sectors. That investment helped to create 344 high-paying jobs and to bring in an additional $98 million in investment to New Hampshire firms.

Alison Pyott is a wealth manager with Veris Wealth Partners and a member of the Foundation’s Piscataqua Region Advisory Board.

She said that her clients – particularly women and younger generations – want to know that they can “invest for return…and make an impact on the issues they’re passionate about.”

Last year, existing impact investments by the Foundation brought a financial return of 2.6 percent. The goal is for the fund to bring a near-market-rate return.

One investor, who keeps his giving anonymous through the Foundation, said he wants to provide entrepreneurs and other New Hampshire ventures with access to capital that gives them a shot at success.

“I trust the Foundation’s research and judgement,” in making the investments, he said. And he appreciates the opportunity to earn a return that then is available for more grantmaking through his donor-advised fund.

He said it comes down to three things: “Trust, a fair chance and enlightened self-interest. This is like hitting the trifecta.”

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The Charitable Foundation, the New Hampshire Community Loan Fund and Live Free and Start are co-hosting a series of “Investing in NH” seminars around the state. For more information and to register, visit: http://livefreeandstart.com/nh-investing-forums/