Fran Seegull Testifies at IRS Hearing on Opportunity Zones

U.S. Impact Investing Alliance Executive Director Fran Seegull testified before the Internal Revenue Service on the importance of data collection and transparency in Opportunity Zones at a public hearing held February 14, 2019. Echoing written comments she called on the IRS and Treasury to take action to immediately begin collecting fund- and market-level information related to investments in Opportunity Zones.

The goal of the Opportunity Zones tax benefit, as stated in the preamble to the proposed regulations, is clear: “to encourage economic growth and investment in designated distressed communities.” We believe that data will be essential both to creating these new economic opportunities and to ensuring that people living and working in Zones today are the ultimate beneficiaries.

Through a variety of mechanisms, the collection and reporting of basic data will encourage the flow of private investment capital off the sidelines and into Opportunity Zones.

First, information connects potential investors and Opportunity Fund managers to investment opportunities. Because investors have to deploy capital into Opportunity Funds within 180 days, it is important that we establish tools to quickly identify opportunities that align with their investment objectives and investment timing needs. The Department can facilitate these efforts through appropriately-scaled collection and reporting of basic Opportunity Fund data, to include publicly-available information that would enable investors, operating business owners, developers and other interested parties to connect with Opportunity Funds serving their markets. 

Second, transparency around Opportunity Fund activity will help state and local leaders ensure their Opportunity Zones are able to attract investment capital. They might do so by deploying additional resources or by aligning zoning requirements and other economic development policies. Market data will allow community advocates and local officials alike to understand what’s working to stimulate the flow of capital and to adjust state and local policy accordingly in real-time.

Third, consistent and transparent collection of Opportunity Fund data will allow for a rigorous evaluation of the Opportunity Zones policy itself. A common framework for collection and reporting of Opportunity Fund data should create a baseline data set. This will enable the long-term evaluation of the policy and its impacts on Opportunity Zones, both individually and in aggregate.

Read her full statement here.

Impact Investing Leaders Introduce Opportunity Zones Reporting Framework

The U.S. Impact Investing Alliance and Beeck Center for Social Impact + Innovation at Georgetown University collaborate to create a shared framework to guide best practices in the Opportunity Zones market

NEW YORK, NY, February 6, 2019 -- The U.S. Impact Investing Alliance (“USIIA”) and the Beeck Center for Social Impact + Innovation at Georgetown University (“Beeck Center”) today released a set of principles and a detailed impact measurement framework to help guide the development of the Opportunity Zones market.

The Opportunity Zones Reporting Framework, a voluntary guideline, is designed to define best practices for Opportunity Fund managers seeking to invest in designated Opportunity Zones around the country. Market participants will be encouraged to abide by these best practices and to proactively share how and where they will deploy capital as part of a collaborative effort to build the market and maintain a focus on the policy’s original purpose: achieving positive economic and social outcomes in distressed communities.

The effort to develop a shared understanding of how to measure impact in Opportunity Zones was identified as a key next step by participants in a July 2018 roundtable at the Federal Reserve Bank of New York. The concept was socialized in October 2018 during a convening of real estate developers and investors hosted by the Beeck Center and was further refined in December 2018 during USIIA-hosted roundtable discussions with venture capital firms and leading wealth management platforms. Building on those meetings, the co-authors worked with a broad array of industry leaders, including investors, asset managers, academics, policy experts and community stakeholders, who all contributed to developing the principles and measurement framework. These contributors include individuals from: The Federal Reserve Bank of New York, Economic Innovation Group, the Urban Institute, Sorenson Impact Center, Rockefeller Foundation, Enterprise Community Partners, Local Initiatives Support Coalition (LISC) and several leading wealth management platforms.

“Opportunity Zones represent a once-in-a-generation opportunity to spur private investment into America’s distressed communities. However, in order for us to achieve the transformational impact we hope for, such as equitable growth and economic opportunity, it is important that those entering this market remain committed to transparency and community engagement,” said Fran Seegull, Executive Director of the U.S. Impact Investing Alliance.

“The only way we will know if the Opportunity Zones policy is effective is by continuously measuring and proactively evaluating the long-term outcomes,” said Lisa Hall, Fellow in Residence at the Beeck Center. “To truly be successful, we should see measurable evidence of social and economic benefits that accrue to the people who live and work in the Opportunity Zones. This framework is meant to guide investors, fund managers and community stakeholders to make sure that they are contributing to that shared goal.”

The Opportunity Zones Reporting Framework includes five core principles for Opportunity Fund stakeholders:

  1. Community Engagement: Opportunity Fund investors should request that fund managers integrate the needs of local communities into the formation and implementation of the funds, reaching low-income and underinvested communities with attention to diversity.

  2. Equity: Opportunity Fund investments should seek to generate equitable community benefits, leverage other incentives and aim for responsible exits.

  3. Transparency: Opportunity Fund investors should be transparent and hold themselves accountable, with processes and practices that remain fair and clear.

  4. Measurement: Opportunity Fund investors should voluntarily monitor, measure and track progress against specific impact objectives, identifying key outcome measures and allowing for continuous improvement.

  5. Outcomes: Opportunity Fund metrics should track real change, with an understanding that both quantitative and qualitative measures are valuable indicators of progress.

The Reporting Framework builds upon these principles with a core set of criteria that can be deployed across a range of investment types. Examples of these criteria include the size of the fund, the investment focus (e.g., affordable housing, small businesses, etc.) and the amount of impact generated (e.g., jobs created, new businesses formed, affordable housing created or preserved, etc.). It further seeks to help articulate how stakeholders collectively can define and measure the long-term outcomes, like educational attainment or economic mobility, of Opportunity Fund investments.

“We strongly believe that continued community engagement can lead to both better investment decisions for investors and better outcomes for the residents of these Opportunity Zones. We hope that this framework can serve as a useful tool for local leaders and community groups as they think about how best to engage with Opportunity Funds, and we hope that fund managers will likewise be welcoming and receptive of these local champions,” said Jennifer Collins, Fellow in Residence at the Beeck Center.

“In order for the Opportunity Zones market to function, we need a shared framework to monitor, measure and report on both financial and impact data. This data will show us where capital is flowing and how that capital is being used, thereby revealing where there are structural barriers and where there are opportunities. A shared commitment to transparency will help create a more efficient market and ensure that capital flows to the areas—and the people—that need it most,” said Seegull.

The Opportunity Zones policy was passed as part of the Tax Cuts and Jobs Act of 2017. The policy allows individuals and businesses to defer the taxes on their unrealized capital gains by reinvesting the capital into Opportunity Zones, which are low-income communities located around the country. More than 8,700 Opportunity Zones have been chosen by state governors and certified by the Treasury Department.

To learn more about the Opportunity Zones Reporting Framework, please go to

Development of the Opportunity Zones Reporting Framework is made possible by the generous support of the Rockefeller Foundation and Kresge Foundation. 

About the U.S. Impact Investing Alliance
The U.S. Impact Investing Alliance is a field-building organization committed to raising awareness of impact investing in the United States, fostering deployment of impact capital across asset classes, and working with stakeholders, including government, to help build the impact investing ecosystem. Its vision is to catalyze a movement that will transform finance by putting measurable social, economic and environmental impact, alongside risk and financial return, at the core of investment decisions. For more information, please visit

About the Beeck Center for Social Impact + Innovation at Georgetown University
The Beeck Center for Social Impact + Innovation is an experiential hub at Georgetown University that trains students and incubates scalable, leading edge ideas for social change. We believe impact at scale requires the courage to think and behave differently. Our work centers on re-defining incentive structures and aligning them to improved outcomes for individuals and society. We equip future global leaders with the mindset to promote outcome-driven solutions, using the tools of finance, data, and civic voice. We convene actors across the public, private, and civic sectors to advance new tools, frameworks, and approaches necessary to achieve these outcomes. For more information, please visit

Media Contact
Dmitriy Ioselevich

BUILD Act Passage Signals New Era for U.S. Development Finance

Bipartisan legislation signed into law today looks to spur up to $100 billion in new private sector investment in emerging markets around the world.

Using blended finance, the Federal government will look to attract impact investors and other private capital to projects that advance development and diplomatic goals.

Development finance is an increasingly important tool embraced by governments around the world, using loans, guarantees and other financial tools to supplement more traditional forms of direct foreign aid. Impact investors seek a range of risk-adjusted financial returns while also pursuing measurable, positive social and environmental outcomes. Development finance institutions and impact investors often work hand-in-hand on projects and shared objectives.

With the President’s signature of the Better Utilization of Investments Leading to Development Act (“the BUILD Act”), the United States is preparing to enter a new era of development finance. Since its creation in 1971, the Overseas Private Investment Corporation (“OPIC”) has been the United States’ development finance institution, investing in more than 160 countries and consistently generating a financial return for tax payers while supporting projects that produce economic opportunity and advance strategic objectives.

The BUILD Act looks to continue that strong institutional track record in creating a new agency, the U.S. International Development Finance Corporation (“IDFC”), which will take over the work of OPIC and fold in certain offices of the U.S. Agency for International Development (“USAID”). The IDFC will be equipped with expanded authority to engage private investors, to operate in least developed countries and to collaborate with American allies around the world.

U.S. Impact Investing Alliance Executive Director Fran Seegull made the following statement:

“The U.S. Impact Investing Alliance is encouraged by the continued commitment leaders in Washington have shown to leveraging private capital for public good. The BUILD Act was spearheaded by a bipartisan coalition of lawmakers, policy experts and development practitioners, and as efforts begin to establish the new agency that same broad coalition must remain deeply engaged.

“Impact investors will be important partners for the new IDFC, with a shared commitment to development impact and deep expertise deploying capital in challenging local contexts around the world. IDFC will play a central role in accelerating the global impact investing movement, unlocking more capital for impact by catalyzing new investors to align their portfolios with global development goals.”

Quick facts about the U.S. International Development Finance Corporation (IDFC):

  • The IDFC is a development institution with a mandate to catalyze private sector capital to flow to projects and enterprises that will measurably improve social and economic conditions in communities around the world.

  • The BUILD Act creates a new position of Chief Development Officer to oversee the agency’s commitment to labor, environmental and rule of law standards. The Chief Development Officer will also oversee private sector engagement and work to build partnerships with USAID, State Department and other development institutions.

  • The IDFC will also have a new Development Advisory Council composed of outside experts and practitioners to advise on the institution’s impact objectives and outcomes.

  • The IDFC will have new tools at its disposal, such as the ability to make equity investments or investments denominated in local currencies, which will create a nimbler institution better able to partner with private market actors and American allies.

  • The IDFC will crowd-in private investment in developing countries by focusing on projects and enterprises that would not be viable without IDFC’s participation. Additional resources to perform feasibility studies and provide technical assistance support this mandate.

  • The IDFC has a mandate to create jobs in the United States and half of the American companies it partners with on investment opportunities will be small businesses including woman and minority owned businesses.


About the U.S. Impact Investing Alliance

The U.S. Impact Investing Alliance is a field building organization committed to raising awareness of impact investing in the United States, fostering deployment of impact capital and working with stakeholders to help build the impact investing ecosystem.

Why impact data and transparency are keys to the success of opportunity zones

This article was originally posted to ImpactAlpha. Follow their coverage of Opportunity Zones to stay informed about how impact investors are using this powerful new community development tool.

Assets in impact investing continue to surge, buoyed by increasing investor interest in aligning financial goals with social and environmental objectives. Today such assets represent as much as one in five of all U.S. assets under professional management.

How do we know this? We have the data to back it up.

Data is integral to the success of any program, product or policy, and to the continued functioning of the financial markets. Data shows us where capital is flowing and how that capital is being used; it tells us a story about where there are structural barriers and where there are opportunities. Data allows all stakeholders—from fund managers and investors to community members and policymakers—to have a shared understanding about what works and what doesn’t.

It is with this vision in mind that the U.S. Impact Investing Alliance today wrote Secretary Mnuchin to urge the Treasury Department to make collection of basic opportunity fund data and metrics a priority as they roll out proposed regulations for opportunity zones—the latest piece of legislation designed to drive private capital towards investments in distressed U.S. communities.

Our letter highlighted several metrics that we believe should be reported to Treasury, at a minimum, on an annual basis, including information about the size, location and nature of investments into opportunity zones. We also encouraged the collection of additional impact-oriented data points, such as the number of jobs created, the number of people lifted out of poverty or the number of new businesses started, to more accurately assess the impact of each opportunity zone investment.

There is already a groundswell of excitement around opportunity zones, with many investors beginning to analyze designated communities for potential investible opportunities. At the same time, the people who live and work in these communities are trying to understand how they should be engaged for opportunity zones to succeed as both investments and as public policy.

Fostering and facilitating that engagement will require a common framework for understanding the impact of opportunity zone investments. Communities and investors alike will need such tools to evaluate both the financial and impact prospects of any potential opportunity fund investment

A significant number of industry leaders and advocates have already come out strongly in support of impact transparency in opportunity zones. These leaders include the heads of the Economic Innovation Group, Enterprise Community Partners and LISC, prominent impact investors like Jim Sorenson, and private philanthropies like the Kresge and Rockefeller Foundations.

And in a recent meeting co-hosted by the U.S. Impact Investing Alliance with the New York Federal Reserve and Beeck Center at Georgetown, attendees from policy shops, universities, community development finance institutions, foundations and fund managers underscored how important transparent data is to a well-functioning market. Our comment letter today builds on this ongoing conversation. The common-sense reporting that we are asking for will help communities, investors and policymakers work together to build this market.

The impact investing movement owes its growth and success to industry leaders reporting data and sharing best practices. For opportunity zones to experience a similar surge in interest and capital, and to generate the kind of transformative impact in low-income communities that its creators envisioned, it is vital that Treasury embrace basic data reporting and transparency for opportunity zones.

Opportunity Zones: Moving Toward a Shared Impact Framework

The tax bill passed in 2017 includes a provision creating various benefits for investors that move capital gains into designated low-income census tracts, known as Opportunity Zones, through special investment vehicles known as Opportunity Funds.

This tax benefit has captured the attention of a wide range of stakeholders — from investors attracted by a new tax incentive to community development practitioners drawn by the promise of increased investment in low-income areas.

Many elements of this new investment tool are uncertain, including if and how Opportunity Funds will manage and report on the social and environmental impact of their investments. Yet even amid this uncertainty, investors are looking to take advantage of the benefit.

What is certain is that Opportunity Funds are another tool in the community development tool kit — primarily for state and local players — and they underscore the importance of place-based investment. The tax benefit will drive capital to the nation’s most distressed areas, but the activities that capital supports must be rooted in a local context.

Ensuring that these investments result in meaningful and inclusive economic development will require a coordinated effort by a diverse consortium of leaders. With that in mind, on July 19, the U.S. Impact Investing Alliance, the Beeck Center, and the New York Fed convened a roundtable of community development investors, researchers, and practitioners to discuss the future of Opportunity Zones.

Read More

U.S. Impact Investing Alliance Statement on Department of Labor ESG Guidance

Field Assistance Bulletin 2018-01 Seeks to Clarify Fiduciary Consideration of ESG Factors

On April 23, the Department of Labor published a “Field Assistance Bulletin” providing guidance to fiduciaries of private-sector employee benefit plans. The note served as a clarification related to the DOL 2015 guidance on economically targeted investments and the DOL 2016 guidance on shareholder engagement. While remaining clear that fiduciaries must prioritize financial returns, the DOL confirmed that pension managers can and should feel comfortable using ESG factors as an input in evaluating potential risk and financial return.

Fran Seegull, Executive Director of the U.S. Impact Investing Alliance, released the following statement:

“The guidance from the Department of Labor reaffirms the direct, material impacts that environmental, social and governance factors can have on financial performance, as demonstrated in the significant and growing body of financial and academic research. It further confirms that pension plan fiduciaries may engage management – both directly and through proxies – in order to maximize the long-term economic value of their investments.

"While the advisory offers some notes of caution, we believe the economic case for evaluating the material impacts of ESG factors on both risk and financial return remains as clear as ever. It is not without reason that a growing number of retirement plans, alongside leading banks, insurance companies, foundations and individuals, are recognizing that responsible long-term investment strategies demand a full and complete accounting of impact factors.”

Clarification of Guidance on ESG Considerations (DOL IB 2015-01)

  • The Department of Labor remains clear that in many cases, “ESG issues present material business risk or opportunities.” As stated in the 2015 Interpretive Bulletin and restated in the Advisory language, “if a fiduciary prudently determines that an investment is appropriate based solely on economic considerations, including those that may derive from environmental, social and governance (ESG) factors, the fiduciary may make the investment without regard to any collateral benefits the investment may also promote.”
    • This thesis has been corroborated by several studies proving the positive correlation between ESG practices and business outcomes. Oxford University and Arabesque Partners reviewed 200+ academic analyses and found that firms that rated highly on ESG factors enjoyed lower costs of capital (90% of firms), better operational performance (88%) and higher stock prices (80%).
    • With growing sophistication and reporting accuracy, investors are able to recognize, demonstrate and account for the materiality of ESG considerations on underlying financial performances. Though the Department of Labor has never mandated consideration of these factors, the Field Assistance Bulletin recognizes and reasserts that plan participants are increasingly demanding their plan sponsors consider ESG factors and make ESG-themed investment options available. Three-quarters of U.S. defined-contribution plan participants surveyed by Natixis Investment Managers said they would like to see more socially responsible options included in their retirement plans.
    • Managers are also increasingly aware of the fact that it may be imprudent to ignore these material risks and opportunities. Flows into U.S. funds that incorporate ESG factors were at an all-time high for the second year running in 2017. A report from Morningstar showed net flows of $6.5 billion last year, more than three times their level just two years earlier. Buoyed by strong returns, the AUM of these funds also grew to $95 billion.

Clarification of Guidance on Shareholder Engagement (DOL IB 2016-01)

  • Likewise, the guidance reasserts that managers should take an active role as shareholders if they believe it is necessary to enhance long-term investment performance. Once more, the Department of Labor is recognizing the materiality of environmental, social and governance risks to long-term financial performance.
    • In discharging their fiduciary obligations, investment managers are able to “engage with companies to learn [and share significant concerns] about corporate governance practices, or company actions to manage its environmental risks, human capital, facilities, stakeholder relations, and long-term access to critical resources.”
    • While the guidance warns against incurring outsized costs in pursuing this type of engagement, it recognizes that, through carefully considered strategies and with the assistance of consultants or proxy advisories, plan administrators are able to increase the economic value of the plans investments. The guidance will spur efforts already underway to quantify the economic benefits of active ownership.

New Language on Qualified Default Investment Alternatives

  • The guidance offers new language around Qualified Default Investment Alternatives (QDIAs) – referring to asset allocations including target funds which an employee might be automatically opted into. The guidance suggests that including an ESG fund as the default investment alternative would require a rigorous demonstration of its superior return expectations relative to other options. However, including an ESG fund as one of many options for a participant to select from, particularly where participants are expressing a desire to invest in accordance with their “personal values”, remains appropriate.
    • Clear and consistent regulation benefits the industry. Although the bulletin language could chill the nascent growth of ESG target-date funds (TDFs), financial services providers have always focused on the economic case for these exciting new products. The bulletin will help sharpen that focus and turn attention to the increasingly robust evidence base of ESG performance. The DOL should continue to work with the industry to ensure that retirement plan managers and participants have access to best-in-class financial instruments.

Looking Ahead

  • The DOL regularly issues clarification for Employee Benefits Security Administration (EBSA) investigators and plan administrators, and with an emergent field like ESG investing, this type of clarification should be expected.
    • The fundamental contention that ERISA fiduciaries must above all else safeguard the interests of plan participants is clear and uncontested. Fiduciaries must carefully evaluate every investment decision, and we don’t ask that ESG-themed investments get special treatment.
    • The data shows, and will increasingly show, that investors who have proactively mitigated ESG risks and capitalized on ESG opportunities will be at an economic advantage relative to peers .
  • For impact investors, this guidance should underscore the critical importance of field building at this critical juncture. Pension fiduciaries, plan participants and regulators are looking to the market to develop and advance the best practices which will guide further adoption of ESG investment strategies.
    • These efforts will require a commitment to robust and transparent data in addition to collaboration on research, education and policy.  As we further deepen understanding of the material impacts of ESG factors, together we will build the case that the future of investing is impact investing.


About the U.S. Impact Investing Alliance

The U.S. Impact Investing Alliance is a field building organization committed to raising awareness of impact investing in the United States, fostering deployment of impact capital and working with stakeholders to help build the impact investing ecosystem.

Congress Passes the Social Impact Partnerships to Pay for Results Act (SIPPRA)

Included in the recently passed Bipartisan Budget Act of 2018 was the Social Impact Partnerships to Pay for Results Act (SIPPRA). This legislation is the result of more than five years’ worth of efforts by bipartisan lawmakers to create a standing pool of capital to support outcomes based financing. It builds on the work and learning of the Social Innovation Fund, state level pay for success projects, and the global movement to create social impact bonds. It was also highlighted as a priority in the National Advisory Board on Impact Investing’s report, Private Capital for Public Good.

At the U.S. Impact Investing Alliance, we have been following this bill closely as we know it is a topic of interest to many of our members. The hope is that by creating this new federal resource to support evidence based policies, states and localities will be encouraged to think about how this type of program can improve outcomes for their communities in need. By supporting programs traditionally funded across numerous federal departments and agencies, it looks to embed evidence based practices throughout the federal government.

The enacted legislation provides for a $92 million fund to be housed at the Department of Treasury. It highlights a wide range of outcomes eligible for the program, including improved child and maternal health, reduced homelessness, lowered rates of recidivism and increased youth employment, among others. The key criteria is that outcomes must “result in social benefit and Federal, State, or Local savings.” The Treasury is instructed to publish a request for proposals from states and localities within the next year.

Stay tuned for updates.