SOURCE: NPX Advisors

NPX Advisors

July 20, 2016 09:00 ET

NPX Launches the Impact Security: A Novel Financial Product That Explicitly Links Financial Returns With Social and Environmental Impact

The Company's Proprietary Impact Security Is a Powerful New Financial Instrument Bringing Together Donors, Impact Investors and Nonprofit Organizations to Finance Impact

SAN FRANCISCO, CA--(Marketwired - July 20, 2016) - NPX, an innovative company that is transforming how impact is financed in the nonprofit sector, today announced the launch of the Impact Security, a novel financial product that explicitly links financial returns with social and environmental impact. NPX released today a detailed white paper on the Impact Security as well as a summary infographic.

The Impact Security is a debt security issued by a non-profit organization, foundation, government or supranational entity, featuring variable returns that are contingent on the achievement of predetermined impact metrics. The performance incentives, standardization, accountability and transparency inherent in the Impact Security structure aim to foster integrity and promote broader participation in the emerging impact investing and pay-for-success sectors.

"The Impact Security combines the contingent returns concept found in Social Impact Bonds and other pay-for-success financings with an established capital markets structure-a debt security. Because the proprietary Impact Security is issued by a nonprofit, a foundation, a governmental or a supranational entity, the offering is exempt from SEC registration, which has noteworthy practical implications such as offering the securities publicly and reaching a potentially larger audience of interested impact investors," said Anna Pinedo, a Morrison & Foerster securities partner. Morrison & Foerster LLP has served as NPX's pro bono legal counsel since 2013.

The Impact Security offers donors a new way to give that maximizes impact; provides impact investors with a financial product that pays financial returns based on impact; and offers nonprofit organizations access to new sources of capital with a focus on impact. NPX is currently working with the world's most innovative donors, nonprofit organizations and impact investors to structure Impact Security deals.

"The nonprofit sector is shackled with an opaque, inefficient fundraising system where capital is disconnected from impact," said Lindsay Beck and Catarina Schwab, Co-Founders & Co-CEOs of NPX. "By expanding the fundraising and investing options of donors, impact investors and non-profit organizations in a standardized, performance-focused way, we believe that the Impact Security will transform how impact is financed in the nonprofit sector and beyond." Lindsay and Catarina have collectively spent more than three decades working in the nonprofit and finance sectors.

To date, Impact Bonds and pay-for-success financings have generally been limited to government entities and the nonprofit service providers that they fund. NPX is expanding participation with philanthropists and foundations, which also expands the types of nonprofit organizations eligible to participate. Private donors are excited to use the Impact Security to make impacted-based donations to a wide range of organizations with measureable impact -- donations that catalyze new sources of capital, unlock impact data and drive accountability and transparency around achieving results.

"This new financial product is the inevitable evolution of philanthropy. It provides efficient capital allocation and forces nonprofits to be accountable for outcomes," said Tony MacDonald, CFO of Samasource, a nonprofit social enterprise that provides work to people living in poverty through data-based outsourcing services. "At Samasource, like other organizations harnessing the explosion of data measurement, we are rapidly improving our ability to document the results donors demand, but are challenged to invest in the lengthy and convoluted fundraising process. The Impact Security is a watershed instrument for the social sector. It is inevitable that the smart donors will gravitate towards this instrument that pays for the impact success delivered, rather than promised, and in doing so rewards the best performing nonprofits."

About NPX

NPX is transforming how impact is financed in the nonprofit sector and beyond. The company created the Impact Security, a proprietary financial product that explicitly links capital with impact, to give donors, impact investors and nonprofit organizations a new, better way to fund impact. NPX works with innovative clients to pioneer novel ways of financing impact, including facilitating, structuring and launching Impact Securities. Learn more at www.npxadvisors.com or follow us on Twitter @NPXAdvisors.

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