Sorenson Impact Foundation
Overview
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Founded Since 2012
Company Description
Our Mission
The Sorenson Impact Foundation was created to advance the flow of capital into innovative, scalable solutions to the world’s most pressing needs.
Foundations historically use only 5-10% of their assets each year to advance their missions. Learn how we decided to use 100% of our assets every year to accomplish our mission.
A letter from our founder, James Lee Sorenson
After almost a decade of learning-by-doing and a never-ending commitment to forging ahead in a nascent space, I am proud that the Sorenson Impact Foundation (SIF) has held true to its mission of serving the needs of underserved communities around the world through supporting innovative, game-changing start-ups and the impact investing space broadly. Part of our success has been our parallel commitment to be nimble, react to the inevitable change in a new and growing space, and open our hearts and minds to the notion that some of the greatest discoveries are yet to be realized.
In the year 2021, most people and institutions do not need to be convinced of the validity of the statement:
Where you invest your money, matters
For the Sorenson Impact Foundation, why we invest in impact investments is clear: to do more with our money than just earn a return. As a charitable foundation, we have a philanthropic portfolio that we use to make concessionary investments whereby we accept higher risk or potentially lower returns for the prospect of high social return. But in the larger portfolio, the endowment of our Foundation, we invest the endowment in a portfolio that generates a strong return and grows so that we can continue to distribute grants and investments and conduct our work in perpetuity.
It is our belief, backed by the data we’ve collected on our own journey, that investing for impact as well as returns is not just a “feel good” thing to do, it is an opportunity to capture outsized financial returns. Impact is increasingly being used as a proxy for quality: companies that do better by our people and our planet tend to do better financially. When they treat their employees and suppliers well, they have lower turnover, higher innovation output, and far less headline and political risk. When they treat the communities they work in and the environment they are a part of with care and respect, they establish long-term foundations and partnerships for sustainable growth.
We focus on sustainability by focusing on impact
70%of the funds we are invested in are either owned or managed by a woman or a person of color, which is over 5x higher than most institutional portfolios, including other foundations.
Our strategy has paid off
Since we began this journey, our portfolio performance has beat our benchmark by a wider margin than ever before. Changing our portfolio allocation helped us avoid the negative impact of some of the largest industry failures in 2019 and 2020. And importantly, our investments are now doing more than earning money: they are lowering carbon emissions, supporting diversity and inclusion efforts, accelerating new education and healthcare access solutions, and building affordable housing among others.
It was a learning process for us to embark on a novel strategy like this, but this process has yielded a great benefit: we are proud that our dollars are invested in alignment with our values, and we believe that we are supporting the growth of a more sustainable, equitable world.
“I believe there is a way to make mission-aligned investments that will sustain the funding into the future”
– Jim Sorenson
Founder
From Entrepreneur to Impact Investor
Raised in a family of entrepreneurs, Jim grew up with a belief in the power of business to help solve problems in sustainable, scalable ways to improve the lives of the poor and the emerging middle class around the world.
Jim took the lessons he learned in his childhood and and applied them to his career where he learned early on to proactively pursue investments in new markets where he was able to see business opportunities in previously non-commercial fields—a skill that he would later put to work in his impact investing career.
In 2002, after a decade of development and tens of millions of dollars in investment, the company he had built — Sorenson Media — was primed for commercial success just as the dot com bubble burst and halted the markets. Jim found himself leading a company that had a monthly burn rate of $1 million and whose market demand had all but evaporated.
Jim went back to the drawing board and in collaboration with a hearing-impaired family member realized that they could transition the company’s products to enhance communication for the deaf and hard of hearing. Sorenson Media was well positioned to offer a better service than major telecommunications companies resulting in the successful turnaround of the company (later spun off as Sorenson Communications) while also improving the quality of life for millions of deaf people.
Today, Jim spends most of his time and energy in the impact investing field through three key elements: 1) investing in early-stage enterprises that lack access to commercial capital and are developing products or services that improve livelihoods for people in poor or marginalized markets; 2) investing in creative financial structures that unlock greater flows of capital to scalable innovations and; 3) building a vibrant impact investing ecosystem. Impact investments are only part of my impact investing work; recognizing that building a robust impact investment market requires a healthy supporting ecosystem. Impact investors, just like conventional investors, depend on the work of researchers, advisors, wealth managers, entrepreneurs, industry experts, and others in order to make well-informed, successful investments.
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