Catalyzing markets to create impact in India

In partnership with the foundation, NYU Wagner Social Innovation & Investment Initiative analyzed more than 40 foundation-related investments, and together we developed a MISSION framework to document its impact investing strategy. The framework is comprised of the following elements: Market, Impact, Scale, Sustainability, Incrementality, Organization and Next. This blog is the first in a series on the MISSION framework and will provide an overview of our work in impact investing and the development of the framework.  Read the full case study here .

As a foundation committed to transforming lives of children living in urban poverty, we’ve always anchored our work around three parameters – impact, scale, and sustainability. With our mission as our north star and our core social impact principles as our anchor, we have experimented with several approaches, structures and tools to achieve large-scale and sustainable impact where it matters most. One such experiment was our foray into impact investing in India in 2006 as we worked to leverage market-based solutions to achieve such impact.

We are neither a mainstream investor nor a pure grant-making organization – we see ourselves somewhere in the middle, blending the two worlds. Our journey over the last 12 years in impact investing has been exciting – we have learned several lessons, seen some successes, and made refinements to our approach. We have also seen that while the success of impact investing as a tool to address developmental challenges has been reasonably well established, there has been limited documentation of its success. So, we invited New York University’s (NYU) Wagner School of Public Service to synthesize some of our key learnings, successes, impact metrics, and best practices in our journey so far.

This exercise offered us a good opportunity to reflect on how impact investing has evolved over the past few years. Back when we started, the term “impact investing” had not even been coined. Very few investors were willing to take the risk of developing products and services for the people who comprise the bottom of the income pyramid. However, we realized that the Indian market was ripe for impact investing because of its robust entrepreneurial culture and scalability. We saw the opportunity to increase the penetration of urban microfinance in India and zeroed in on investments, alongside grants and technical assistance, as a tool to catalyze this market. Since then, we have made over 40 impact investments across the areas of education and family economic stability.

One of the key elements of the case study is a framework that we’ve developed with NYU’s support. Over the course of our experience in the sector, we’ve organically developed a strategic approach to evaluating and executing every potential investment. The NYU team helped us package this approach into a ‘MISSION’ framework that is an acronym for Market, Impact, Scale, Sustainability, Incrementality, Organization, and Next. Together, each of these factors guides our decision-making process when it comes to identifying the most appropriate funding tool for a specific opportunity.

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While there are no shortages of challenges in this space, the opportunities are endless. As a foundation, we place a premium on collaboration. While impact investing has the potential to solve complex social challenges at scale, no one organization or individual can do it alone. A combination of talent, ideas, resources and execution is the only way to create lasting solutions which is why we need several like-minded investors and other stakeholders to join this movement. Through the case study which can be accessed here, we hope to invite investors—including foundations and corporations—to diversify their strategies to incorporate impact investing alongside other support mechanisms for greater social impact.

We will be sharing a blog series exploring the distinct aspects of the MISSION framework over the next few weeks, where you will hear different perspectives about this work. Stay tuned to find out why we think this work is so critically important.