This course explores a spectrum of financial tools used to create social value, as well as financial value. Traditional financial instruments are ultimately judged by...More >>
This course explores a spectrum of financial tools used to create social value, as well as financial value. Traditional financial instruments are ultimately judged by their bottom line: the financial returns they produce. This course examines financial instruments designed to produce not only financial returns, but also social returns; these instruments are commonly known as "double bottom line" investments. Such financial instruments exist on a spectrum from grants- where no financial return is contemplated- to market or near-market rate investments that have positive social impact. In between are program-related investments, community development venture capital investments, and socially motivated loans. Special purpose financial institutions called community development financial institutions have emerged that use a range of investments to achieve social goals; the course will examine the structures and social missions of these institutions. It will also look at the role of various actors, such as foundations and government, in fostering such activity. In addition, the course will consider the challenges of measuring and quantifying social returns produced by double bottom line investments.