Impact First Fund

## Approach Strategy

The Impact First Fund, operated by Social Finance, represents a fundamentally different model from traditional philanthropy. It is a registered investment advisor's impact-first fund of funds -- meaning it pools capital from donor-advised funds (DAFs), foundations, and accredited investors, then deploys that capital into early-stage funds and enterprises that prioritize measurable social and environmental impact over financial returns.

Key Strategic Insight: This is not a traditional grantmaking foundation. The Impact First Fund sits at the intersection of philanthropy and investing, specifically designed for the growing category of philanthropic investors who want their dormant DAF assets or foundation PRIs (Program-Related Investments) to generate impact while maintaining some financial return. Social Finance, the parent organization, was founded in 2011 by Tracy Palandjian, Sir Ronald Cohen, and David Blood, and now has 120+ team members across offices in Austin, Boston, New York, San Francisco, and Washington, DC.

Investment Philosophy: The Fund targets what conventional capital markets leave behind -- early-stage funds and enterprises serving low-income communities of color, rural communities, and other underestimated groups. It provides flexible, reasonably priced capital to funds that cannot yet attract conventional investment on terms they need to grow. The dual portfolio approach (social impact + environmental impact) allows diversification across affordable housing, economic mobility, financial inclusion, workforce development, energy transition, clean water, climate justice, and sustainable agriculture.

For Grant Seekers: If you are a nonprofit seeking traditional grants, the Impact First Fund is not a fit. However, if you are a CDFI, social enterprise, impact fund manager, or mission-driven business seeking catalytic early-stage investment, this could be a critical capital source.

## Funding Patterns

Fund Structure: With approximately 1.64 million dollars in IRS-reported assets (likely understating actual AUM given the fund-of-funds structure and capital commitments), the Impact First Fund deploys capital through two primary investment themes:

Social Impact Portfolio: - Affordable housing (e.g., Blackstar Stability Distressed Debt Fund -- preserving single-family home ownership in Black communities) - Economic mobility (e.g., Grameen America -- microfinance for entrepreneurs) - Financial inclusion (e.g., Apis and Heritage Capital Partners -- employee ownership fund that surpassed 250 million dollars in target) - Workforce development (e.g., RuralWorks Partners -- growth capital for job-creating rural businesses)

Environmental Impact Portfolio: - Climate justice (e.g., Afterglow Climate Justice Fund -- 36 million dollars in lending to frontline communities) - Sustainable agriculture (e.g., Mad Capital -- financing for regenerative organic agriculture transition) - Clean energy and water investments

Investment Characteristics: - Targets early-stage funds and enterprises - Provides flexible capital at reasonable pricing - Low minimum investment threshold for investors - Asset allocation approach facilitating varied liquidity needs - Offers non-monetary support (technical assistance, network access) alongside capital - Publishes quarterly reports (Q1-Q4 2024 and Q1-Q4 2025 available)

Capital Mobilized: Social Finance as an organization has mobilized over 500 million dollars across all its programs, operating in 37+ states since 2011.

## Peer Comparison

Peer Set: The Impact First Fund occupies a specific niche in the impact investing ecosystem:

1. Calvert Impact Capital -- Larger, more established impact investing platform. Calvert's Community Investment Note is open to non-accredited investors (lower barrier), while the Impact First Fund targets accredited investors and institutions. Both focus on underserved communities.

2. ImpactAssets -- Operates a DAF platform with impact investing options. ImpactAssets' Giving Fund is a direct competitor for DAF dollars, but they offer a broader range of investment options including public equities. The Impact First Fund is more concentrated on early-stage, high-impact opportunities.

3. Blue Meridian Partners (Jim Shelton, CEO, endorsed Social Finance) -- Blue Meridian focuses on scaling proven social programs through large philanthropic bets. The Impact First Fund is earlier-stage and more investment-oriented.

4. Candide Group -- Manages the Afterglow Climate Justice Fund (which the Impact First Fund invested in). More of a partner than competitor, focused specifically on climate justice investing.

5. Mission Driven Finance -- A CDFI that has received investment from the Impact First Fund ecosystem. Focused on childcare facilities and community development.

Impact First Fund's Differentiators: - One of the few fund-of-funds structures specifically designed for DAF and foundation PRI capital - Backed by Social Finance's 15-year track record and 37-state operational footprint - Uniquely bridges the gap between traditional philanthropy and impact investing - Quarterly transparency reporting exceeds industry norms for early-stage funds - Endorsed by leaders from Ford Foundation (Darren Walker), Robert Wood Johnson Foundation, and Blue Meridian Partners - Parent organization (Social Finance) also operates complementary workforce and public sector programs, creating a broader impact ecosystem

## Application Tips

Critical Caveat: The Impact First Fund is NOT a traditional grantmaking foundation. It is a registered investment advisor's impact-first investment fund. It does not accept grant applications.

For Fund Managers Seeking Investment: 1. Demonstrate impact-first orientation -- The Fund explicitly targets investments that prioritize impact over financial returns. Your fund must lead with measurable social or environmental outcomes. 2. Focus on underserved communities -- The Fund prioritizes managers from and/or serving low-income communities of color, rural communities, and under-resourced groups. Diverse fund manager teams have a clear advantage. 3. Be early-stage -- The Fund specifically targets emerging managers and early-stage enterprises that cannot yet attract conventional investment. If you are already raising institutional capital at scale, this may not be the right fit. 4. Align with investment themes -- Social impact (affordable housing, economic mobility, financial inclusion, workforce development) or environmental impact (energy transition, clean water, climate justice, sustainable agriculture). 5. Contact Social Finance directly at https://socialfinance.org/contact-us/ to explore investment opportunities.

For DAF Holders and Foundation Investment Officers: 1. Low minimum investment -- The Fund was designed for varied investor sizes, including smaller DAFs and foundations. 2. PRI-eligible -- Structured to qualify as Program-Related Investments for private foundations. 3. Accredited investor requirement -- Must qualify under Rule 501(a) of Regulation D. 4. Quarterly reporting -- Extensive transparency with published quarterly reports.

For Nonprofits: If your organization is a CDFI, social enterprise, or mission-driven business (not a traditional nonprofit seeking grants), the Fund's investees may be relevant intermediaries. Consider whether organizations like Grameen America, RuralWorks, or Mission Driven Finance could serve as capital channels for your work.