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Explore Impact Investing
with Donor-Advised Funds

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Explore Impact Investing with Donor-Advised Funds

How can you ensure your investment delivers real impact as well as market rate returns?

Despite the dramatic growth in impact investing, challenges remain in identifying and executing on financially-compelling, direct investment opportunities that will yield real social or environmental benefits.

LOHAS Advisors empowers individuals and organizations to generate the impactful outcomes they desire.

“Some newcomers entering the [impact investing] market may be bold in their pursuit of impact, and others may be more incremental and cautious; for those who choose to start more incrementally, we wish to embed the mindset that this is the first step in their journey, not the final destination.”

– Amit Bouri, CEO,  Global Impact Investing Network

Impact Investment
Asset Classes

  • Direct private equity 76% 76%
  • Real estate (e.g. green buildings, affordable housing) 32% 32%
  • Private equity funds 24% 24%
  • Infrastructure (e.g. renewable energy, public transportation) 18% 18%
  • Direct private debt 15% 15%
  • Public Equity 13% 13%
  • Private debt funds 10% 10%
  • Cash & cash equivalents 6.5% 6.5%
  • Public debt 0% 0%

Source: The UBS/Campden Wealth Global Family Office Report 2019

“Two years ago, 10% considered mission to be important, now… 40% of family offices are already expected to align their portfolios more closely with social and environmental values.”

– Mark Haefele, Global Chief Investment Officer, UBS Wealth Management

Impact Investment Sectors

  • Education 45% 45%
  • Agriculture & Food 45% 45%
  • Energy & Resource Efficiency 43% 43%
  • Health care and wellness 38% 38%
  • Environmental Conservation 34% 34%
  • Housing & Community Development 34% 34%
  • Sustainable consumer products 29% 29%
  • Job creation 26% 26%
  • Women’s Empowerment 26% 26%
  • Access to finance 22% 22%
  • Sustainable infrastructure 22% 22%
  • Infrastructure 11% 11%

Source: The UBS/Campden Wealth Global Family Office Report 2019

“Let’s get real – individual investors have no sway in the public markets. The place where individual investors can have the most impact – by far – is in providing direct growth capital to private companies and social enterprises.  Instead [we are] giving investors an (arguably) false sense of doing good through ESG funds…”

– Don Shaffer, former CEO, RSF Social Finance

Impact investments are meeting or exceeding financial expectations for 91% of investors.

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For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Impact Peformance

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Performance Relative to Expectations

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Financial Performance

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Source: Global Impact Investing Network

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Outperforming

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

In Line

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Underperforming

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

3%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

9%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

82%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

76%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

15%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

15%

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Impact Performance

Impact Performance

Impact Performance

Performance Relative to Expectations

Performance Relative to Expectations

Performance Relative to Expectations

Financial Performance

Financial Performance

Financial Performance

Source: Global Impact Investing Network

Source: Global Impact Investing Network

Source: Global Impact Investing Network

Outperforming

Outperforming

Outperforming

In Line

In Line

In Line

Underperforming

Underperforming

Underperforming

3%

3%

3%

9%

9%

9%

82%

82%

82%

76%

76%

76%

15%

15%

15%

15%

15%

15%

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Fast-growing and creative sources of capital are now being used for direct impact investing.

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Total Number of Donor-Advised Funds

Total Number of Donor-Advised Funds

Total Number of Donor-Advised Funds

241,507

241,507

241,507

272,845

272,845

272,845

289,478

289,478

289,478

463,622

463,622

463,622

2014

2014

2014

2016

2016

2016

2017

2017

2017

2018

2018

2018

2015

2015

2015

0
0

463,622

463,622

463,622

728,563

728,563

728,563

2017

2017

2017

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Source: 2019 Donor-Advised Fund Report, National Philanthropic Trust.

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0
0
0
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Total Assets in Donor-Advised Funds ($B)

Total Assets in Donor-Advised Funds ($B)

Total Assets in Donor-Advised Funds ($B)

$70.05

$70.05

$70.05

$77.18

$77.18

$77.18

$86.45

$86.45

$86.45

$112.10

$112.10

$112.10

$121.42

$121.42

$121.42

2014

2014

2014

2016

2016

2016

2017

2017

2017

2018

2018

2018

2015

2015

2015

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Source: 2019 Donor-Advised Fund Report, National Philanthropic Trust.

Despite the dramatic growth, obstacles for impact investors remain

Most common challenges in impact investing


Areas addressed by LOHAS Advisors

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For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Difficulties measuring social/environmental impact

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Due diligence challenges

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Difficulties identifying attractive deals/funds

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Market at early stage/immature

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Lack of track record data on performance

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Lack of supportive/knowledgeable advisers

0%

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Returns don't meet expectations

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Lack of government support

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Lack of time/staff resources

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

High levels of risk

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Insufficient knowledge/skills

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

Scale of the deals (too big/too small)

For the serious traveller, Traveller Magazine is a mine of information, keeping you up-to-date with the latest trends in travel and tourism.

High Costs

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Difficulties measuring social/environmental impact

Difficulties measuring social/environmental impact

Difficulties measuring social/environmental impact

Due diligence challenges

Due diligence challenges

Due diligence challenges

Difficulties identifying attractive deals/funds or lack of deal flow

Difficulties identifying attractive deals/funds or lack of deal flow

Difficulties identifying attractive deals/funds or lack of deal flow

Market at early stage/immature

Market at early stage/immature

Market at early stage/immature

Lack of track record data on performance

Lack of track record data on performance

Lack of supportive/knowledgeable advisers

Lack of supportive/knowledgeable advisers

Lack of supportive/knowledgeable advisers

0%

Returns don't meet expectations

Returns don't meet expectations

Returns don't meet expectations

Lack of government support

Lack of government support

Lack of government support

Lack of time/staff resources

Lack of time/staff resources

Lack of time/staff resources

High levels of risk

High levels of risk

High levels of risk

Insufficient knowledge/skills

Insufficient knowledge/skills

Insufficient knowledge/skills

Scale of the deals (too big/too small)

Scale of the deals (too big/too small)

Scale of the deals (too big/too small)

High Costs

High Costs

High Costs

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Source: The UBS/Campden Wealth Global Family Office Report 2018
Note: Respondents were able to select multiple options
Source: The UBS/Campden Wealth Global Family Office Report 2018
Note: Respondents were able to select multiple options

 Areas addressed by LOHAS Advisors

Our Guide to Impact Investing

For Family Offices, Foundations, and the Social-Minded

A Primer on the dramatic evolution of the social and environmental impact investment market

Who We Help

Those who can, want to do more. Impact investing and venture philanthropy are coming together to make the social changes in areas important to them. Direct private investing is the mechanism best suited to deliver real impact. LOHAS Advisors provides greater visibility into the innovators making a difference and looking for the right financial partners.

Family Offices

Family Offices

Financial professionals serving wealthy clients may be asked to identify or perform due diligence on direct social or environmental impact investments or may want to expand their practice to incorporate these type of investment options.

HNWI’s & UHNWI’s

HNWI’s & UHNWI’s

High and ultra-high net worth individuals may want to move beyond public ESG investing to have a more significant direct impact on causes important to them but need help developing and executing a proactive, impact investment strategy.

Wealth/Asset Managers & Investment Advisors

Wealth/Asset Managers

Financial professionals serving wealthy clients may be asked to identify or perform due diligence on direct social or environmental impact investments or may want to expand their practice to incorporate these type of investment options.

DAF’s and DAF Sponsors

DAF’s and DAF Sponsors

Parties creating donor-advised funds (DAFs) as well as DAF sponsors looking to help their clients distribute funds more effectively may need assistance identifying or performing due diligence on direct social or environmental impact investments.

Foundations

Foundations

Foundations may recognize that their portfolios do not fully match their mission and want to use PRI’s or other investment mechanisms to make direct impact investments but need support or additional resources to help identify and analyze these opportunities.

Corporations

Corporations

Corporations seeking social or environmental impact investments and to bolster their brand and align better with tomorrow’s thought leaders may benefit from deal sourcing strategic support or help leveraging investment mechanisms unique to the impact sector.

Venture & PE Funds

Venture & PE Funds

Venture and private equity fund managers targeting social or environmental impact investors may benefit from guidance on better positioning their fund offerings for that audience and then with tracking impact performance to satisfy the demands of those investors.

Real Estate Developers

Real Estate Developers

Real estate developers seeking to take advantage of the green building zeitgeist or capitalize on opportunity zone investments may benefit from deal sourcing support or guidance on how to make the most of project financing approaches.

How We Help

LOHAS Advisors supports clients in satisfying direct impact investment demands

We're here to help you evaluate:

  • Market trends (to educate and determine optimal areas of focus)
  • Investment portfolio strategy (to set the direction for the initiative)
  • Investment types (to establish parameters for deal identification)
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Ultimately, LOHAS:

  • Sources targeted investment opportunities
  • Performs due diligence
  • Supports execution and helps realign priorities

Donor-Advised Funds and Impact Investing

Learn how these fast-growing and creative sources of capital are now being used for direct impact investing by downloading our Donor-Advised Funds brochure.
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“Investors have been thinking for decades on how to get harmful things out of their portfolios, but [impact investing] is about proactively investing in solutions. It is that much more intentional step about investing in things like climate change directly.”

– Amit Bouri, CEO of the Global Impact Investing Network

LOHAS follows an internationally accepted process to ensure investment alignment.

Define Vision

  • Clarify motivation and context
  • Define impact goals and evaluation criteria

Determine Engagement Strategy

  • Evaluate fit within existing portfolio
  • Decide on impact portfolio construction approach

Develop Investment Guidelines

  • Review existing or develop new investment guidelines, integrating impact goals

Execute Strategy

  • Source investments
  • Perform due diligence

Evaluate Portfolio and Adjust Strategy

  • Monitor financial and impact results
  • Evaluate outcomes and adjust your investment strategy

Define Vision

  • Clarify motivation and context
  • Define impact goals and evaluation criteria

Determine Engagement Strategy

  • Evaluate fit within existing portfolio
  • Decide on impact portfolio construction approach

Develop Investment Guidelines

  • Review existing or develop new investment guidelines, integrating impact goals

Reach Internal Alignment

Execute Strategy

  • Source investments
  • Perform due diligence

Evaluate Portfolio and Adjust Strategy

  • Monitor financial and impact results
  • Evaluate outcomes and adjust your investment strategy

Implement and Evaluate

Reach Internal Alignment

Implement and Evaluate

“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing… can be wonderful.'”

– Warren Buffett

Principal Advisors

Dan Hughes

Rick Davis

Tami Kesselman

Jared Gonsky

“LOHAS” is a market segmentation term that stands for “Lifestyles of Health and Sustainability” and refers to that portion of the population that aspires to a healthier and more socially and environmentally conscious way of life and makes investment and buying decisions accordingly.

LOHAS tailors its advice to support the passions of its clients and ties those activities to the United Nations Sustainable Development Goals for tracking purposes.

Source: United Nations Sustainable Development Goals