By Elena Marks
EHF’s president and CEO
As EHF works with its partners to support solutions that address the underlying causes of poor health in Texas, impact investing is an additional tool that can sustain and scale the results of grantmaking. That’s why we’re implementing an impact investing strategy and researching innovative ways that loans and investments can help improve health across the state.
Overview
Defined as the practice of investing in companies, organizations and funds with the intention to generate measurable social and environmental impact alongside a financial return, impact investing has been in use since the late 1960s to increase access to opportunity and accelerate solutions to social problems. An enhancement to grantmaking, impact investing is not meant to substitute for still critically-needed grant support.
EHF has conducted a landscape scan to determine the range of ways in which impact investing can help Texas communities improve health outcomes while increasing the availability of products and services that are more innovative, effective, and/or affordable than existing options.
As EHF implements its impact investing strategy, we are continuing to interview health sector organizations, entrepreneurs and researchers statewide to learn whether and how access to flexible and affordable loans or equity investments might help them to better achieve their goals. We are also researching how health sector organizations in other states are using impact investing to innovate and scale their services, as well as how health systems, foundations and others are investing in approaches that we might adapt in our state.
EHF has backed a pay for success investment that seeks to reduce avoidable emergency room visits and hospital stays for chronically homeless individuals and we’ve developed a pipeline of health-related impact investments that we are underwriting. This includes potential venture capital investments in healthtech companies and a potential investor collaboration to expand access to flexible community health clinic finance.
EHF impact investing strategy to improve population health in Texas
EHF is interested in hearing from—and about—health sector organizations and entrepreneurs with promising concepts that can improve the health of Texans and benefit from impact investment. Investments can be in any asset class (such as debt or equity) and can offer market-rate or more flexible expected financial returns. The foundation will target investments between $250,000 and $1,000,000 but may consider investments above and below the targeted range on a case-by-case basis.
Targeted Impact – EHF’s impact investments seek to advance at least one of the following strategic goals delineated in the Foundation’s 2018–2022 Strategic Plan. We particularly seek to advance measurable improvements in:
· Resource allocation and system reform in the health sector reflecting the goal of improving health, not just healthcare
· Low-income and vulnerable populations’ access to comprehensive care in their communities
· Health systems’ and families’ capacity to implement best practices for early childhood brain development during pregnancy and the first 1,000 days of life
· Transformative and innovative approaches to upstream, systems-level, social determinants of health that level the playing field for vulnerable populations
Eligibility – EHF is seeking to make impact investments in organizations whose products or services address systemic, upstream health challenges to improve the health and well-being of the 11 million people living in the 57 counties of the Episcopal Diocese of Texas. Specific eligibility criteria include both impact (mission alignment) and investment (repayment capacity) factors:
Impact Criteria
· Organization serves or will serve low-income, vulnerable people living in the 57 counties of the Episcopal Diocese of Texas
· Product and/or service with a demonstrated track record of positive impact on communities served
· Product and/or service is more innovative, effective, and/or affordable compared to others in the market
· Robust measurement and evaluation practices
Investment Criteria
· Existing and/or future earned revenue stream
· Liquidity (available cash) to both maintain operations and service repayment obligations
· Viable business plan to maintain or achieve financial sustainability
· Positive track record of repaying any prior financing as agreed
· Management team with strong and relevant expertise to launch, expand and/or scale the organization’s work, including through
managing impact investment obligations
· Network of advisors or board members to fill knowledge or expertise gaps
We invite interested investors and health organizations seeking impact investment to contact us at ImpactInvestment@episcopalhealth.org
