Resources
As an impact-first social enterprise, we realized that there was not a clear or replicable path for social entrepreneurs to raise the capital they need to solve systemic challenges like climate change, poverty, sexism and racism. To build systems that work for 100% of life on planet earth, social enterprises need access to flexible finance, first-loss capital that can take on risk and accept a social and environmental impact premium as reward.
Working with philanthropic investors and 501c3 ImpactAssets, 10Power created a Renewable Energy Access Donor Advised Fund (DAF). We are sharing the Recoverable Grant Term Sheet and Agreement for the DAF open source in partnership with the Force for Good Fund and Echoing Green to help other impact-first enterprises utilize DAFs.
DAFs are the fastest growing investment vehicle in the philanthropic landscape. There is over $120 billion in DAFs today.
Individuals with current or anticipated capital gains can make qualified gifts to DAFs to recognize significant tax benefits. If a philanthropist already has a DAF, they can transfer their holdings to ImpactAssets or other DAF administrators with the tolerance, will, and requisite understanding of IRS rule-making to make catalytic impact investments.
DAFs are highly flexible instruments. Recoverable grants are one type of investment that can be made from a DAF. The Recoverable Grant Term Sheet and Agreement provided here were modeled after the agreement provided by the prestigious Echoing Green fellowship and drafted by Jenny Kassan of the Force for Good Fund, Community Ventures and Sustainable Economies Law Center. The goal of these documents is to help put the capital in DAFs to good work and help social enterprises access growth capital.
If investments made from an impact DAF are successful they will return capital to the DAF and funds can be reinvested in helping future social enterprises reach maturity.
This text does not constitute legal advice.