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Impact investors—both small-scale family funds and, more recently, large-scale institutions—are driving the search for the global food crisis.

Jason Ingle co-founded and is General Partner for Closed Loop Capital, an early-stage venture capital platform investing in exceptional entrepreneurs leading ventures in agriculture technology and food system innovation within the United States and Canada. Jason helped launch and grow Aslan Capital Management, a Credit Opportunities fund based in New York City. Jason also cofounded Greener Partners, a 501(c)(3) not-for-profit organization with a mission of connecting communities to healthy food, vibrant farms, and hands-on education experiences. The organization has grown from a ½ acre garden engaging 200 children with a group of volunteers in 2009 to multiple regional sites including an urban-based farm, hospital-based farm, school-based farm and two mobile truck school gardens engaging in total over 18,000 children annually. Jason is also a cofounder member of The ImPact, a membership network of family enterprises (family offices, foundations, and businesses) that are committed to making investments with measurable social impact.

Jason is a recognized industry leader and frequent presenter on topics including impact investing, food system innovation, strategic philanthropy, and effective board governance. Jason has been invited to the White House twice to highlight his efforts to improve the food system, including by Michelle Obama for his work as co-founder of Greener Partners, and by President Obama to recognize Closed Loop Capital’s leadership as an investor in women-led and minority-led entrepreneurial businesses. Jason serves on his family’s Investment Committee and as the Chair of their family council.


Christopher P. Skroupa: How have you seen the impact investing field developing over the last five years and how do you see the impact investing field evolving over the next five years?

Jason Ingle: In the last couple years, especially, I think you’ve really seen the whole sector get much more developed and formalized. A few years ago, there was a lot more discussion and apprehension around what trade offs investors were going to be making for entering into an impact investing space, so inevitably, you couldn’t get two sentences into a conversation about impact investing before you ultimately started to talk about what kind of concessionary return you could expect by focusing on social and environmental impact and what forfeits would be made on the financial side. The conversation about tradeoff is lessening now, I think. The good news is that with reports being published such as by Cambridge Associates/GIIN and Wharton School and others there’s now evidence that bolsters the argument about why you make impact investments and ultimately, why trade offs don’t necessarily have to be a part of it.

Looking forward, I think we’re seeing the exciting movement from what had been more family offices capable of taking a generational approach to investing wanting to align their investments with their values—they really had the ability to lead the charge. Now you’re starting to see the foundation space coming into impact investing. There were certainly pioneers that were leading the way, but you’re now seeing with the Ford Foundation announcing $1 billion to be deployed in impact investing from their endowment. That is really indicative of the majority of foundations saying 95% of our foundation’s assets are sitting on our balance sheet and doing nothing towards our general mission and core values. That mindset now is being positioned to be much more innovative towards how they use their assets, and I think that’s going to be a huge and dynamic momentum developer for these next couple years where you’ll see a kind of mainstreaming of the impact investment space.

Institutional investors just in the last two years have begun to see this as a kind of opportunity—and a threat as well—as wealth transitions to the next generation, myself included. We’re asking questions as to why our assets are not being invested to make impact as well. If these wealth advisors aren’t going to provide impact investing solutions and services, wealthholders will be picking up and moving their assets to someone who can provide these opportunities to align their assets with their values. With this risk of losing clients, but also the opportunity to attract potential new clients, bigger institutional investors are starting to move more quickly into the space, so I think you’ll begin seeing the mainstreaming of impact investment from the product side and continuing with more sophisticated plans from the investor side.

 

Skroupa: Interesting. So we’re seeing the face of impact investing really changing, but have we seen a focal shift as well? Obviously in your experience, you have a lot of agriculturally aligned impact investing insight, but do you feel you have seen a particular increase or decrease in environmental-based impact investment initiatives? Have you seen any pattern in terms of what people are really targeting in their portfolio design?

Ingle: Yes. The food and agriculture vertical specifically has seen a dramatic change just in the last five or six years. When we started our investment fund, which focuses on early stage investments, there was literally nobody else in that space and you had very little coverage on the media side.

Over just the last few years, we’ve seen a huge influx of interest in a space from prospective investors, but this only occurred because there are very talented entrepreneurs who have identified some of the macro-challenges present within the food system both domestically and globally—both upstream environmentally and downstream socially—who are coming up with some very innovative solutions. From there, you have investors who are capitalizing those entrepreneurs to scale their businesses for positive social/environmental impact.

When we started, there was a band of angel investors like Ev Williams from Twitter, Bill Gates, Richard Branson, as well as a couple of other strategic corporate groups that were investing in food systems solutions, but it was fundamentally a very small group of individuals that saw this space as a place to invest and actively did so. I guess when we got started investing in this space, we basically realized that there are so many macro-challenges from just the biggest, which is how we are going to feed the 10 billion on the planet by 2050—and it’s going to feel more like 12 or 13 billion when you factor in the fact that the majority of that population growth is coming from China and India. They want to continue to adopt a Westernized diet which entails a lot more animal proteins, which is ultimately very inefficient from a growing standpoint.

The negative externalities that present within the field of producing food filter all the way down to the consumer, and some of the challenges you see with obesity rates, heart disease, diabetes and a number of other elements have some relationship with the industrialized food system and everything in between, whether it be traceability, food waste, etc. There are entrepreneurs in every one of these categories now who are highly talented, who are putting together teams, who are coming up with very efficient solutions but ultimately, can’t scale without an investment. When we started, people said, “Why would you invest in agriculture and food? That’s a dinosaur industry that’s been around for a long time and it’s not very dynamic,” but just like many of these industries that are under disruption now due to just the quick, rapid pace of change with technology, that’s the same in this space.

In fact, it can be a tremendous opportunity. As technology is developed, adopted and becomes a viable solution to many of the challenges noted with food production and it creates tremendous opportunity for investors not only to generate a financial return, but to also to support positive social and environmental impact.

 

Skroupa: So we’ve seen this cultural shift, such as China and India adopting this Western diet that’s only amplifying this pattern of a lack of food, then in the impact investor sphere, we’re seeing this shift from angel investors and family offices to these huge foundations like the Ford Foundation. So maybe at the beginning of impact, it was such a small niche that it wasn’t necessarily affecting change on such a grand scale, but do you feel like now, private investing is going to be a major vehicle for change environmentally over public or nonprofit initiatives?

Ingle: That’s a question that’s really starting to emerge. I would say that some in the nonprofit sector are now a bit worried. If you have foundations who are saying we are ultimately going to move a fair amount of our attention and focus to impact investing, they will continue to have their philanthropic side, but there are studies out that show people are really looking and are interested in continuing to grow their impact investing. So there are some worried that potentially, impact investing could cannibalize some philanthropic and charitable funding. I don’t really think so. In my experience and how I see the space within food and agriculture, I see it as very complementary.

I think you’re always going to have a need for philanthropic dollars, which is the ultimate risk capital—it’s going to zero; you’re not going to get it back. That serves a tremendous purpose in continuing to nurture fragile ecosystems.

I think impact investing presents a new tool in the toolkit for a solution that can scale. Before, you might have been able to sustain and maybe slightly ameliorate some of these challenges, but you really didn’t have the ability to create a viable, scalable entity that could really have the thrust to drive towards solutions.

There’s always going to be examples where there’s a potential solution that may never become a viable business, and therefore, philanthropy is going to be needed. You may be in a very early stage where you can’t attract institutional, or even angel investment yet, and you ultimately need grant funding to test, beta, and prototype until it gets to a more de-risked stage far enough along that impact investment can be made.

I think it’s exciting that for the first time, an individual is able to take an integrated approach in everything they do. So if your passion is agriculture or food or education, you can take a holistic look at that area of interest that you have a passionate commitment to and you can look across the spectrum from completely philanthropic on one side of it all the way through the continuum to traditional return-oriented and everything in between. To me, it’s very exciting to be able to take that integrated approach and look for solutions all the way across that spectrum.