Recommendations for Investing in Opportunity Zones 
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Government and Investors Seek to Lift Opportunity Zones, but Communities Will Define Success
Jun 25, 2019, 08:00 ET
A Letter on Behalf of the Presidents' Council on Impact Investing, a Group of 20 Leading U.S. Foundations with a Shared Commitment to Impact Investing and More Than $80 Billion in Combined Assets
. . . there is no guarantee capital will flow to the most distressed neighborhoods, or to the projects that are best for those who work and live there. Indeed, many such Opportunity Zones are at risk of losing out and falling further behind, while Zones in already-gentrifying parts of urban areas like New York City or Washington, D.C., continue to draw the lion's share of development capital.
> We know that there is tremendous potential if we invest in the human and social capital that already exists inside these communities.
> And we also know that success will require clear opportunities for community engagement to ensure local context and priorities are front-and-center in every Opportunity Zone.
Fostering that engagement will take intentional, collective action from everyone involved in this nascent market.
Specifically, we call on policymakers, investors, fund managers and philanthropists to work together to ensure communities have a voice in how this policy is implemented.
Fostering that engagement will take intentional, collective action from everyone involved in this nascent market.
- Policymakers at the federal, state and local levels must leverage appropriate incentives and regulation to protect the voices and advance the priorities of Opportunity Zone residents in this new market. Effective policies, in tandem with civil society and impact investors, should ensure that mayors, county commissioners, local nonprofits and other community stakeholders on the frontlines of this work can access the tools and resources they need to connect with investors and effectively advocate for community interests and outcomes.
- The Opportunity Zone Reporting Framework, released by the U.S. Impact Investing Alliance, the Beeck Center at Georgetown University and the Federal Reserve Bank of New York, provides a model for how fund managers can consistently, transparently and authentically engage with communities. Investors and fund managers in Opportunity Zones must embrace a set of principles that promote authentic community engagement to determine investment priorities, learn and respond to residents' needs and shape a shared vision for equitable development. Opportunity Fund managers should also be proactive and transparent in measuring and reporting the impact stemming from their investments.
- Finally, we as impact investors and as grantmakers must stand committed to using our collective voice to champion residents and hold market actors accountable for the outcomes of their investments.
Opportunity Zones represent less than a quarter of census tracts experiencing distress in the United States. As the rest of the country has enjoyed a decade of robust economic growth following the financial crisis, these distressed communities have slipped further and further behind. Bridging that growing divide and fulfilling the promise of Opportunity Zones for the people living and working inside them today must be the subject of our shared focus and drive.
As members of the Presidents' Council on Impact Investing, we stand committed to supporting this effort. Opportunity Zones have shone a spotlight on specific communities, but if the transformative potential of this policy is realized, the entire nation will benefit from a new wave of inclusive and equitable growth.
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, including government, to help build the impact investing ecosystem. The Alliance's members represent more than 1,000 individual and institutional investors committed to achieving measurable social, economic and environmental impact alongside financial performance.
For more information, please visit www.impinvalliance.org.
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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, Feb. 6, 2019 /PRNewswire/ -- 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 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.
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.
"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:
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.
Equity: Opportunity Fund investments should seek to generate equitable community benefits, leverage other incentives and aim for responsible exits.
Transparency: Opportunity Fund investors should be transparent and hold themselves accountable, with processes and practices that remain fair and clear.
Measurement: Opportunity Fund investors should voluntarily monitor, measure and track progress against specific impact objectives, identifying key outcome measures and allowing for continuous improvement.
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.) > the amount of impact generated (e.g., jobs created, new businesses formed, affordable housing created or preserved, etc.).
> the size of the fund, the investment focus (e.g., affordable housing, small businesses, etc.) > 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. . .
"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
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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 www.OZframework.org.
