Ted Levinson and Maria Luisa Chavez of Beneficial Returns share their journeys in social impact and their work in Latin America, where they support social entrepreneurs addressing poverty and environmental sustainability. They explain why impact investing is a powerful tool for international development and lasting positive change.

1:09 | Meet Ted Levinson – background in social finance and founding Beneficial Returns

3:40 | What is a social enterprise?

4:25 | Meet Maria Luisa Chavez -shares her path from traditional finance to impact first investing

4:42 | What makes Beneficial Returns different from other impact investors

8:25 | Why Beneficial Returns uses debt instead of equity to support social enterprises

11:12 | Overview of the Beneficial Returns Fund and the types of social enterprises they support

16:22 | Why philanthropic money is a great tool for impact investing

18:50 | What makes Latin America a great place to invest in social enterprises

28:14 | Impact Opportunity of the Month: Grupo Murlota – empowering women through poultry microenterprises

33:15 | What's next for Beneficial Returns

34:27 | Moments that changed your perspective on impact

39:22 | Impact Opportunity: How can you invest in Grupo Merlota

40:29 | Impact Inbox: How UI Charitable Advisors evaluates impact organizations

Links from this Episode

Learn more about Beneficial Returns here: https://beneficialreturns.com/

Invest in Grupo Murlota: https://iig.uicharitable.org/impact-opportunities/post/debt-opportunity-groupo-murlota-Zin5ybkutI5L4zW

Link to the book Factfulness: https://www.amazon.com/Factfulness-Reasons-World-Things-Better/dp/1250107814

More Impact Innovations content: https://iig.uicharitable.org/

Transcript

Jaxson Thomas - Welcome to the Impact Innovations Podcast, where we elevate philanthropy to be more intentional, effective, and impactful through collaboration, learning, and innovation. My name is Jaxson Thomas. I'm one of the team members behind the Impact Innovation group and an associate at UI Charitable Advisors.

This is the third episode of our podcast. In today's podcast, our co-host Todd Manwaring sits down with Ted Levinson, the founder of Beneficial Returns, an impact investing company focused on investing in small and medium social enterprises in Latin America and Southeast Asia. We'll also be joined by Maria Luisa Chavez, the managing director of Latin America Investments. Later in the podcast, I'll dive into the Impact Opportunity of the month.

Finally, we'll wrap up the podcast with the Impact Inbox, where my co-host Tanner Mills will answer one of your questions about social impact and philanthropy. Let's dive right in. 

Todd Manwaring - Welcome everyone today to the Impact Innovations podcast. Today we're talking with Beneficial Returns, an impact investment group that funds outstanding social enterprises that reduce both poverty and often improve the environment. Today we're talking, as you've already heard, with Ted Levinson, founder and CEO, as well as Maria Luisa Chavez the Latin America manager. 

I think I'd like to start with both of you as a bit of your experience and really giving us a sense of your path to Beneficial Returns, some of the things you've done before. I'm going to start with you, Ted. You've been involved in finance for some 23, 24 years. The last 16 focused on debt and loan activities with social enterprises. You're also an Eisenhower Fellow. Tell us a bit about that journey. 

Ted Levinson - Sure. Well, Todd, I started my career in small business finance, making loans here in the U.S. to average businesses that keep our economy afloat. And I was very fortunate. I went to work for a nonprofit called RSF Social Finance in San Francisco where I made loans to social enterprises and socially minded businesses in the US and Canada. And while I was managing the lending program at RSF, I became aware that there was in my mind a much bigger need and a much bigger opportunity to do this work in emerging markets and that's what motivated me nine years ago to leave RSF and to launch Beneficial Returns.

Todd Manwaring - Right. That's incredible. And then I know your wife has probably had some influence on this. She's been involved as a social entrepreneur. Would that be true to say? 

Ted Levinson - That would be accurate. Yes. My wife, Jane Lu, is an Ashoka fellow. She's received an award from the Ballard Center at BYU. And she started a nonprofit called Upwardly Global that works with refugee and immigrant professionals and today runs a company out of the Philippines called Smarter Good that serves nonprofits. 

Todd Manwaring - Help us understand one question before we move to Maria Luisa. Help us understand what a social enterprise is. 

Ted Levinson - Sure. Well, I would compare it to a regular old fashioned enterprise. So your regular enterprise is a company focused on profit maximization and a social enterprise is a business focused on impact maximization. 

Todd Manwaring - Okay, that's a good definition. 

Ted Levinson - Nice and simple. Nice and simple. 

Todd Manwaring - And we'll jump into that some more as we learn and discuss more about Beneficial Returns. Maria Luisa, tell us a little bit about your journey. 

Maria Luisa Chavez - Of course. So my journey started in working as an office manager at a French investment bank in Mexico City. So the dark side. Then I moved to an early venture capital fund that was focused on impact investing according to them. But it wasn't until I met my co-founder at El Buen Socios that I really understood what impact investing is all about and the power of doing impact first finance.

So my work at El Buen Socios, what we used to do there, is to give financial education workshops and also tailor-made medium-sized loans to small-scale rural producers in Mexico. So kind of what we do at Beneficial Returns but at a much smaller scale. But that helped me understand firsthand the needs of the social entrepreneurs, mostly rural, in Mexico, and how to involve the different stakeholders who want to support them. So we can use finance as a tool, as an instrument that can change the world. 

Todd Manwaring - That's a great path as you described that. Thanks for doing that. Ted, tell us a bit about beneficial returns. What makes beneficial returns different from other impact lenders or other impact investment organizations that are working in the developing world? 

Ted Levinson - I would say that there are few differences. First of all, Todd, we are social entrepreneur centric. We exist to serve social entrepreneurs and the poor people that they serve. So when I launched Beneficial Returns, I didn't start with the classic question that people often ask when they're launching a fund. Who do I know with money and what do they want? Instead, we started with a very different question. We started with a question, what do we think the world needs? 

And so that mindset has continued to guide us throughout our nine years. So we knew that social entrepreneurs needed access to long-term affordable financing so that they could both expand and deepen the impact that they were having. So that's one big difference, we're social entrepreneur focused. 

We move very quickly. We can, in a matter of under two months, we can go from meeting a social enterprise to cutting them a check. And we feel like the need is urgent, people's time is valuable, and we need to respect that. We need to say no quickly when the answer is no, and we need to get to work and move to a yes if that's where we're headed. So we work very quickly. 

The other big difference I would say is that we provide long-term financing. And this is especially difficult to secure in the geographies where we operate. We lend money in Latin America and also in Southeast Asia. And it's nearly impossible for businesses to secure loans of three, four, or five years without pledging land or real estate in those places. And we know that most businesses can't afford to repay a loan to buy equipment, which is what we finance in 12 or 18 months. So we distinguish ourselves by offering long-term financing so businesses can acquire the capital, the equipment that they need to grow while still having very manageable, affordable monthly payments.

Todd Manwaring - And as monthly payments, those are loans. Why not equity? 

Ted Levinson - We are investing in social enterprises that are deeply committed to impact. That's what motivates them. Earlier, I was talking about our definition of social enterprise. These are not folks trying to maximize the money in their pocket. These are social entrepreneurs trying to really make a big dent in poverty and protect and improve the environment.

And what that means is that if these businesses start making a lot of money, they're not going to put it in their pocket. They're going to go to an even more challenging geography, or they're going to hire more people, poor people, or they're going to lower the cost of what they're selling to poor people. There are only three ways that you can make money with an equity investment. One is that the company goes public and in the markets where we operate, there are very few IPOs. 

The second is that the company is acquired and there aren't too many acquisitions in the markets where we operate. And most of our entrepreneurs are not interested in selling their business. This is their life calling. 

And thirdly, it's dividends. And as I mentioned, most of our borrowers are profitable or if not profitable, darn close. But if they start generating big dividends, they're going to plow that back into their work. And yet, as our track record proves, these businesses can borrow and repay money and grow. So we believe that debt is the best instrument to use to invest in deep social enterprises. 

Todd Manwaring - Talk to us a little bit about that track record you just mentioned. What does that look like? 

Ted Levinson - Well, we have been lending money for nine years. And we have an outstanding portfolio of social enterprises that are delivering deep impact and paying us back. Since we launched, we've only had one single borrower that has gone out of business and defaulted on their loan. We have always been able to repay our investors on schedule. We pay our investors every six months. And today our portfolio is all performing according to plan except for one single borrower who's delinquent with us. 

So considering the markets where we're operating, considering the types of businesses that we're lending to, we think we have really strong financial performance and impact performance as well. 

Todd Manwaring - There's two primary funds you have with beneficial returns that are investing in these organizations. I think we really ought to talk about the Beneficial Returns Fund and the Reciprocity Fund. If you could describe that a bit and maybe Maria Luisa, you can think of connections with Latin America. 

Ted Levinson - Sure. The Beneficial Returns Fund is our flagship investment pool. We borrow money from family foundations, donor advisors, including many at University Impact. We pull that money to make long-term senior secured loans to well-established social enterprises. What does that mean? That means we're financing equipment for these businesses and we're taking that equipment as collateral. And we are financing established social enterprises, businesses that have maybe 10 to 100 employees, revenues of maybe half a million dollars up to 10 million dollars. They've got a product, they have a service, they've had some success and these are growing social enterprises. 

We repay our investors every six months. They participate via a recoverable grant. They don't earn a financial return but they get all their money back and we're using philanthropic money. I should mention we lend up to half a million dollars per borrower and our average is about $200,000. 

The Reciprocity Fund makes smaller, unsecured loans exclusively to enterprises that benefit indigenous communities in Latin America and Southeast Asia. And almost all of our borrowers just don't benefit indigenous communities. They're actually owned by indigenous people. So we have over 50 borrowers in this pool and the vast majority of them are indigenous agricultural cooperatives. And folks borrow money for equipment. They borrow money for working capital, which is a huge need for cooperatives and occasionally for improvements to land and real estate. 

And in this situation, we're again borrowing money from family foundations and donor advisors. The difference is we repay our investment after seven years and our investors absorb any of the credit losses that we incur. And so this may sound a little strange, but we guarantee to investors in the reciprocity fund that you will lose money. But we like to compare that to a grant. When you make a grant from your foundation or DAF, you immediately lose 100 % of your money and you do it for the impact that you're having. When you invest in the reciprocity fund, we tell our investors that you should expect to lose up to a third of your money, but up to a third.

But for that small loss that you'll incur, we can leverage that loss by about 10x. So if you invest $100,000 into the reciprocity fund, in seven years, you should get about $80,000 back. And in that period of time, we're able to make $200,000 in loans because our average loan term is about three years. And so you can have $200,000 of impact for the equivalent of a $20,000 grant, 10x leverage. 

Todd Manwaring - Right. Now, that's really interesting. I don't know if you want to add something there, Maria Luisa, that would also help describe those two funds.

Maria Luisa Chavez - Yes, just especially on the reciprocity fund, I would like to focus on the additionality of our loans because I think 90 % of our borrowers have never had a loan before. So it's also about helping the most vulnerable people become agents of their own change. I mean, we've excluded them from the financial system for years and years and we now have to repair the damage we've done to all these people who produce what we eat, who take care of the biodiversity that we've been consciously destroying. And we're striving for a more fair and empathetic society. And by building these bridges to connect capital holders with social entrepreneurs who are doing the hard work and we're trying to shift the power structure that exists today. 

Todd Manwaring - Right. And it sounds like in many ways, assisting those organizations, as you say, what might be a first loan, helping them connect to a financial backing that helps them grow. 

Maria Luisa Chavez - Of course. 

Todd Manwaring - Tell us, Ted, it sounds like the people that you connect with for these funds are predominantly family foundations and also people who have donor advice funds, as you mentioned. Help us understand why that as a profile of the investors that you're trying to bring in, why family foundations and donor advice funds, people who have those, fit better?

Ted Levinson - Todd, think philanthropic capital is the perfect pool of money to tap for the type of work that we're doing. So today in US foundations and DAFs alone, there's over $1.5 trillion, which is an astronomical sum. So it's not only a big number, but it's growing very quickly. This is money that's already received a tax deduction. And it's money that can afford a lot of risk. And frankly, the work that we're doing is risky and the work that our social entrepreneur borrowers are doing is risky. It's money that doesn't have a financial return requirement. Folks don't need access to that money next month or next year. And so I think this is the perfect pool of money for us to tap for the type of deep impact investing that we're doing. 

And we see tremendous potential. Americans are very generous. They give away over $200 billion every year. But think about how much extra impact folks could have if they put just a sliver of that $1.5 trillion to work for impact. 

Todd Manwaring - Right. No, that's a great way of describing this. And here at UI Charitable, we're trying to help them all understand this greater field of focus on really having an impact in people's lives primarily, and recognizing that impact investment is a great way to participate because it brings, I think like Maria Luisa had talked about, it brings this financial market to groups that have been ignored, who haven't been able to receive funds. Maria Luisa, so as Ted described,

Beneficial Returns is working in Latin America and Southeast Asia. Tell us a bit about Latin America. There's probably a lot of misconceptions that I as an American have or other outsiders. Help us understand what are some of the strengths that you see in Latin America that make this a meaningful place for connecting like Beneficial Returns does.

Maria Luisa Chavez - Okay. I'm going to start by being a little bit bold here, Todd, just by saying that we all live in the American continent and we are all stewards of this land and we're interconnected. So we're all Americans. We're not only neighbors, we're actually brothers and we should matter to each other. So that is the first reason why we should look into this region. 

Also, unfortunately, the impact investing ecosystem in Latin America is still very incipient and social enterprises, indigenous led especially, struggle a lot looking for capital that suits their needs and serves their purpose. And you folks in the U.S. are so much more advanced in the topic and we look up to you as role models in impact investing. 

And as you know, the region is suffering an epidemic of political unrest and economic instability and climate crisis in many of the countries we're working in. And also the region is a growing hub for social entrepreneurs, impact entrepreneurs whose ventures are very much aligned with the U.S. priorities such as climate change, other sustainable development goals, social equality, agricultural development, clean energy and so on.

So just to give you some numbers, around 27 % of Latin America's population lived in poverty in 2023. And at the same time, Latin America is a key supplier of agricultural goods to the US and to the world. And the region is helping ensure food security and price stability for US consumers. But just as an example, in the last year in 2024, Mexico accounted for 15.5%, I think it is, of the US total import market. That is around $5 billion. And it makes Mexico the largest source of imports surpassing China for the country. So of course, this is not only coming from social or rural companies, but you get the dimension of it.

So at Beneficial Returns, we focus on different value chains, more specifically sustainable food and agriculture, renewable energies, waste and water management, and livelihoods for the poorest through concessionary loans that help entrepreneurs scale their impact. 

And especially with the Reciprocity Fund, we want to serve these, I think there are 520 plus indigenous peoples who inhabit the region from Northern Mexico to Patagonia. And these represent a big chunk of the population that have been systemically marginalized and excluded and deserve reparation for what we've done to them. So if we want to keep eating tropical fruits and counting on the labor force and protecting the Amazon and other critical natural areas, it is our duty to support these entrepreneurs.

Todd Manwaring - Thank you for sharing that. And tell us what, when you look at the social problems that Beneficial Returns has been focusing on in Latin America, we've talked about the indigenous organizations and others. Are there certain business models that make more sense for you? 

Maria Luisa Chavez - Yes. So we understand that the most pressing problems that the most vulnerable people are facing are related to basic needs such as food production, water and waste management and also access to energies and clean and renewable energies. So those are the industries we want to work in because we also know that they have a lot of impact in the communities we want to have impact in, right?

So either it's a social entrepreneur that is providing a service or a product to the vulnerable people at affordable prices with lean and functioning technologies, or either it's people who are producing the goods or providing the services that will reach to these vulnerable people and excluded communities. We want to finance those different forms of social entrepreneurs. depending on the funds, but we might range from a traditional legal structure of a company to a cooperative or even a non-for-profit that is serving these vulnerable publics we tend to, providing them with services and products affordable and of good quality.

Todd Manwaring - Right. No, thanks for describing that. Ted, would you add anything else about Latin America? 

Ted Levinson - When I look at Latin America, I see high degrees of poverty. see threats to some of our most valuable natural resources that we have on the planet. And I see incredible talent, entrepreneurial talent that is hungry for capital so that they can do more of what they're already doing. That's why we work in Latin America. 

Todd Manwaring - Let's talk about another opportunity. You also have a participation loan opportunity that a few of our donors have participated in. If you could just tell us a little bit about the participation loan and how that works. 

Ted Levinson  - When you invest in the Beneficial Returns Flagship Fund, your money is divided amongst a bunch of different social enterprises located throughout Latin America and Southeast Asia. You get the benefit of diversification. You also get the benefit of our loan loss reserves. This is money that we have that will absorb any losses before our investors see a reduction in their repayment. So it's a secure investment.

Some folks, however, either in addition to or instead of investing in the fund have a particular interest or they could be interested in a financial return. And if any of those resonate with you, you might be a candidate for a participation. With a participation, you are actually buying a percentage of one of our loans. So your money is being earmarked for one particular social enterprise and one particular transaction. 

And you can participate with as little as $10,000 and you will receive a return of 3.5% annually. We repay our participants every three months for the term of the loan based on the payments that we receive. So you receive 3.5% annually provided that the borrower makes all of their payments.

When you participate in a loan, you don't get the advantage of diversification. You don't get the advantage of our loan loss reserves. It's never happened before, but if a borrower pays us nothing, you're gonna get your percentage of nothing. What you do get, what you do get is all of the thrill of a direct impact investment, the opportunity to visit, to speak with that entrepreneur, to maybe even visit those folks on the ground but you don't have to find them. You don't have to negotiate the term sheet. You don't have to underwrite the loan. You don't have to document that loan within country attorneys. You don't even have to bill and collect or report and monitor. 

We do all those things on behalf of our participants and then they get a quarterly check. We think it's a great way for folks who want to be more closely attached to where their money is and what it's doing with very little effort on their own part. 

Todd Manwaring - And we, like you mentioned, we handle the agreements and all of that legal work between your organization and ours. And so really it is a donor saying, here's what I'd like to do. I'd like to participate in this. And I know Maria Luisa, you had mentioned, well, which one do you think we ought to talk about? And I said we ought to talk about the egg business only because here at the moment in 2020 five eggs are very expensive in the United States. And I think it would be interesting for people to understand more about Grupo Murlota and what they're doing, how they are utilizing the loans and give us an idea of what that business is. 

Maria Luisa Chavez  - Grupo Murlota is a Mexican 12 year old social enterprise that operates in the poultry industry or egg business. It is run by Itzel Suarez, a driven energetic woman with a PhD who started investigating the genetics of the hens. And so she built this business that has supported more than 50,000 women launch their own egg operations that go from backyard installations for their own consumption all the way up to commercial endeavors with flocks of more than 1,000 hens. With the main goal of improving, of course, income generation for families, but also nutrition in households.

Their model provides the beneficiaries with mature, fully grown hens. And they also provide them with the chicken coop, the feeders, water stations, and technical assistance so that people who have never had hens before can learn how to produce eggs, take care of the hens, and then either consume their eggs or sell them.

And Grupo Muglota, also their second business line is buying all these eggs from their beneficiaries, whoever wants to sell their production, and then selling those organic cage-free eggs to big commercial grocery stores in Mexico. 

So this business has grown. We gave them their first loan in 2022 for $120,000. They wanted to buy a truck, a bigger truck that could help them move their eggs from one place to the other and they've been successfully paying for that. And so, Itzel has reached out to us because she was just approved for a new loan of $250,000 so she can buy all the equipment necessary to reproduce the hens and grow them themselves instead of importing them. So that's the story of Grupo Murlota. 

Todd Manwaring - Yeah, I really like that. I like how you describe this. Really, I'm seeing there's a family, this woman and her children, and she's very focused on her children. She'd like to bring more income into the family so that the family could be healthier, so the children could be in school. Then this group provides the knowledge and the skills and the tools, being the hands and some feed and really instruction on how do you keep them healthy, creating this business. 

The families are utilizing the eggs to add protein into their diets but also they have a chance to sell them. imagine some might be just selling to a neighbor, but then Grupo Murlota is also coming in saying, if you have extra, we'll buy them. Here's the amount we'll buy them from. And so really it's helping this woman to have different choices for how these eggs get used. That's really an interesting model. Yeah, I really like that. 

Maria Luisa Chavez - We love egg businesses.

Todd Manwaring - And just to hear that she's connected with 50,000 different people in Mexico that are participating in this, that's obviously a big scale kind of activity. And so that should be really interesting to hear and understand the type of organizations that you're participating in. Ted, if you would give us a sense of what's next for beneficial returns.

When you look ahead and you see more people participating with you, more organizations needing funds, what do you think some of the next steps are when you look a year or two out for beneficial returns? 

Ted Levinson - We are going to be doing more of the same, just a lot more of it and a little better at it. So we, I feel like there is a tremendous need for the capital that we're providing in Latin America and Southeast Asia. There is a tremendous amount of that money available for us to persuade and dislodge from family foundations and donor advised funds. And I think we can get better at the work that we're doing. The demand is there, the supply is there. We need to buckle down and connect those two.

What you'll see over the next few years is Beneficial Returns sticking to what we're good at and just doing a lot more of it. 

Todd Manwaring - Another question that we ask everybody, is there a book? Is there an article? Something you saw, something you've experienced that you can look back on and say, yeah, this is something that really triggered my deeper engagement and wanting to be involved in solving social problems. 

Maria Luisa Chavez - Yeah, so I have one very clear story in my mind. It was almost, I think, 14 years ago or so, during a trip with my then boyfriend, now husband, Alberto, to visit the coffee cooperative he used to work for in Chiapas. And so as part of this trip, we went to a friend of his who was a coffee, he's a coffee producer in the Northern jungle. And we spent a weekend at his home, a small wood, tin roof house with dirt soiled at the top of a mountain where you wake up surrounded by the clouds and the sound of howling monkeys. It was a little scary. But we met, we spent time with Shell, Shell is his name.

And Shell is a hardworking, Celtaal, indigenous man from Chiapas. I met his family and visited his coffee plantation. And we had the food that he and his family patiently grow. In his community, there is no running water, there is no sanitation. But there's a natural spring and a composting toilet and the smell of coffee and tortillas. 

They shared whatever little they had with me, with us. And one morning during breakfast, Shell talked to me about this dream he had of raising cattle sustainably and preserving the jungle and providing a source of income and also possibly nutrition for his family and his community. And he wanted to create the living conditions to make his children want to stay at their home in the jungle instead of migrating.

But this was just a dream. I mean, his family was really poor and excluded, and he was just dreaming. Then and there, things got clear for me and my life changed and I decided that I couldn't keep on doing what I was doing. And I really, really strongly encourage every person living on this planet to have an experience like that, like that one I had.

Todd Manwaring - That is an inspiring story. Thank you for sharing that. Ted, let me ask you now the same question.

Ted Levinson - I hesitate to answer after hearing what Maria Luisa just said. I feel like what I'm about to share with you, Todd, doesn't have nearly the same resonance. But I want to recommend a book. It's actually a quick read. It's very eye-opening and it is an optimistic book about global development. And it's informed a lot of my thinking about beneficial returns and the work that we do. 

And it's a book called Factfulness by Hans Rosling. And I strongly urge you, especially if you're depressed by everything that you're reading in the newspaper, to pick up Factfulness. And you'll learn many shocking things, most of which will give you a little more hope about our future. 

Todd Manwaring - That book has had a lot of influence  especially when I was at the university with a lot of students who, like you say, they hear a lot of bad things. And then here's a book that actually describes, but here's the facts and here's what's been changing. And it does give you a lot of hope.

Well, I know, as I mentioned earlier, we're excited to work with Beneficial Returns. We love working with your team. Ted's the only one working here in the US. And then the rest of the team is in Latin America, Southeast Asia, directly engaged and involved with these organizations. And as you mentioned, Maria Luisa, there's opportunities to go on trips to visit and one of our employees just went and had a phenomenal experience. 

Thank you both today for taking the time to connect with us and to share your experiences and really the inspirational work that you're doing to solve issues surrounding poverty and also the environment. Thanks. 

Jaxson Thomas - We'll now shift into the Impact Opportunity of the Month. This month's opportunity is the same opportunity that you just heard about, Grupo Murlota, a social enterprise focused on supporting female entrepreneurs through poultry and egg production. They accomplish this by providing income opportunities for women and families and supporting them in growing those businesses through continued entrepreneurial support. You can invest in Grupo Murlota and support female entrepreneurs and their families. 

There's a minimum $10,000 requirement for this loan, which will provide three and a half percent interest annually paid every six months over three years. 

Although this is the current opportunity that's available, Beneficial Returns has a constant pipeline of interesting and innovative social entrepreneur impact investments. If you're interested in investing in Grupo Murlotta or if you're listening to this podcast at a later time and want to hear about the current opportunities, contact us at impact@uicharitable.org. 

Tanner Mills - This is your co-host Tanner Mills. here with this month's impact inbox where we answer one question for our community about philanthropy. This episode's question is what is your process for evaluating an organization before investing or recommending support? At a high level, our analysis falls into two broad categories. 

The first is similar to any other business diligence that you would see. This takes a close look at their financials where we're looking at their cash runways, their burn rates, their cost structures. We're looking at their revenue stability and diversification of those revenues. We're also looking at any key business opportunities or any key business risks. We're looking at their supply chains. We're looking at their governance and financial controls. 

We also take a close look at their team. As many of us who work in business know that the team is very central to your ability to deliver on what you're trying to accomplish in solving these complex problems. So we look at their team and decide if they're right for the problem, if they have the right operational capacity, if they have the education and training, the technical skill, and if they're really committed to impact and to continuing to learn, and if they're humble and willing and eager to improve their solutions. 

The second part of this analysis is an impact analysis where we're really taking a deep dive into their theory of change. And what we mean by this is can the group clearly identify and are they solving the right problem and understanding it deeply? And do they have the activities that they deliver are tied directly to those goals? Do they have appropriate outputs? Most importantly, are the outcomes that they're delivering appropriate for the solution and the problem? 

We want to see that the groups are not just doing good things, but that their operations are leading to measurable impacts and measurable changes in the people's lives that they're trying to help.

Once our due diligence is complete, we will then bring each of these opportunities to an investment committee where we will review the full analysis and formally approve these deals to be brought to our community members. 

So thank you to all of you for joining us for this episode of the Impact Innovations Podcast. We hope that today's conversation was really inspiring and that you learned about how to approach philanthropy with greater effectiveness.

To continue the conversation or access any additional information, get in touch with us at impact.uicharitable.org. And we look forward to seeing you next time.

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