Power to the People,

with Impact Investment Portfolio's

SummaryInvolve the people of Europe in shaping their future give them the power to help shape it. Let the people act in real life political and economic decision making. Give European households redeemable ECB vouchers for impact investing. To make deposits for and / or invest in positive social and or environmentalimpact. Give the people impact vouchers.

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IntroductionThe McKinsey Global Institute published 'A Window of Opportunity for Europe' report in 2015 and subsequently launched an Essay Competion in 2016 inviting scholars to present their views for the future of Europe1. In this thoughtpiece I present the case for impact investment portfolio's for European households as an adaptation of the suggested helicoptermoney, but with instructions to save or invest for impact. Returns of course can be spend as the investors please.

The purpose of this proposal is to both kickstart the European Union economy through a massive investment injection, but also direct money to economic activities not only creating turnover,work & income, but also social & environmental positive impact.

By offering the people of Europe the means to act in real life political and economic decision making, their attitude towards politics will change. Both in learning about the challenges, but also searching for opportunities to realize their ambitions for more security, economic prosperity, good healthcare & education and a healthy environment to work and live in.

'Democracy is not a spectator sport' President Obama, the first Afro-American US presidentat the Democratic Convention which nominated the first female candidate for the US presidency.

'Everybody complains about politics and the state of affairs. They know exactly whats wrong, but nobody has plans or offers alternatives'. Dutch born German Parliamentarian Kees de Vries, Radio 1, 29th July 2016.

IMPACT VOUCHERSHouseholds impact investment portfolio's will not just drive saving or consumption, as helicopter money could, they will also drive positive social and or environmental impact. The savings and investments generate extra income, interest or dividends, and that will stimulate consumption or more savings. Preferable extra in the peoples social & environmental investments & investees, thus creating a steady flow of capital to social and environmental investing.

1 McKinsey Global Institute 'A window of Opportunity for Europe', Ex Sum, Exhibit 4, page 9, (June 2015)

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Impact Vouchers could be given out every quarter and the savings & investments would be in kept portfolio's paying out interest or dividend automatically or reinvest. Investments will have return related risk and households can loose their investment capital and thus the extra income.

TANGIBLE & TRANSPARENTTo make the power of the households saving & investing tangible offer local, regional, national, European, Global and thematic savings & investments. So people know in who & what they are investing. Local and Regional as the European adaptation of the USAs successful CommunityDevelopment Financing created by the Community Development Act revitalizing local economies and forunderserved communities. National as in sovereign bonds, but it would be more appealing if households could invest in government areas they find most relevant such as health care, education, security & safety. Popular bonds would get lower interests through higher demand which leaves room for higher salaries, training, research, development and innovation etc. European investing as e.g. in EuropeanInvestment Bank bonds, aiming at green and sustainable development (which fortunately are already offered to retail investors). Global investing as in the efforts of EU countries to support social & economic development globally.

Thematic savings & investments refer to financial strategies and investment products for themes such as climate change & water management, diversity & equality, sustainability & fair trade, the circular economy, resource scarcity etc. Not so different from the drivers for growth the McKinsey Global Institute defines: Investing for the Future, Mobilizing the workforce and Boosting markets and productivity2.A focus on lending or investing in social & sustainable small and medium sized enterprises (SMEs) will appeal to household as the most powerful local employment driver, which is nr1 on the publics agenda. Be it short or long term, for providers or their (future) children and grandchildren.

2 Idem: Mobilising the workforce (Grey and female labour-force participation, Pro-growth immigration & Enhanced labour-market flexibilty); Boosting markets and produc-tivity (Public-sector productivity, Competitive and integrated markets in services and digital, Further openness to trade); and Investing for the Future (Supporting urban development, Nurturing ecosystem for innovation, Effective education to employment, Productive infrastructure investment, Reduced energy burden, Reigniting investment and job creation)

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Thanks to the power and reach of the Internet even SMEs are easy to find and support by going there and buying goods and services or through on line sales. SMEs can also benefit from access to all kinds of cooperation and knowledge sharing. The world wide quality of the Internet makes international and diaspora consuming, lending or investing possible. From household to household and creating a new flow of capital next to remittances of migrant workers. Because the world is bigger than Europe and we should share it's resources.... With all is inhabitants, human, animal and plant life.

SME investment supportThe impact voucher system could thrive with support for SMEs infrastructures. To organize themselves in cooperatives for funding and innovation purposes resembling the guilds, the social-economic structurescreated during the industrialization era, cooperatives and modern fin tech innovative forms to organize themselves. Locally and in sectors, but also with their supply chains: connecting producers to consumers through direct mutual interest.

An intermediary layer of service providers offering investment funds would accelerate capital flows towards social enterprises. Like the intermediaries in which the Uks Big Society Capital invests3. Just as intermediaries supporting SME social enterprises to become investor ready, scale up and constantly innovate their activities.

Corporations sustainability agenda(large) Corporations pursuing ESG (Environment Social and Governance) goals are obviously eligible for investment with impact vouchers. But especially corporations that pursue the UN's new Sustainable Development Goals. As Redefined Capitalism valuing corporations on their ability to solve societal demand and challenges. And democracies define, guide and facilitate the transition to new core activities.4

3 https://www.bigsocietycapital.com/what-we-do4 Nick Beinocker & Nick Hanauer Capitalism Redefined in http://democracyjournal.org/magazine/31/capitalism-redefined/ (Winter 2014)

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FINANCIAL RETURNS & SOCIAL AND ENVIRONMENTAL IMPACT?I am talking about savings and investment vouchers for inclusive impact investing. A term coined by super sustainable 'internationally leading' Dutch Triodos Bank, whose chairman Peter Blom was the EU representative in the G7 Social Investment Taskforce. The bank manages a mere 12billion Euro in the Netherlands, but it's not the only Dutch supersustainable bank, we have ASN Bank and Anthos Bank that even has a fiscal charity status managing leading impact investment funds. The three of them hardly dominate the Dutch banking sector, but they seriously influence thinking, practice and innovation.

Rabobank is our Green bank financing agriculture, food security, and promoting Green Bonds, ABNAMRO bank promotes sustainable property, invests in Social Impact Bonds and recently launched a retail SME fund with the Dutch Development Bank FMO. Actiam was the the first to launch impact investment funds, also an SME fund for developing countries with FMO and ING, once forerunner in microfinance, is stepping up its impact investing activities. Together the largest Dutch pensionfunds and insurers, all institutional investors, hold 24billion Euro in self reported impact investments around the world. Which makes The Netherlands, the 20th economy of the world, world champion :)

Investment Power to the People!So far impact investing has been an exclusive affair. High Net Worth Individuals, charitable foundations, institutional investors , private bankers, asset managers and financial advisors got on to see if they could do with impact investing what micro finance and financial inclusion are doing for the banking of the poor.And they worked hard: developing a track record, an impact metric system to be sided with the financial returns, investment and knowledge sharing networks, investment fund (returns) databases, tailored education, sector specific knowledge, seed & start up funds, priming the pump etc.

The financial infrastructure already existsAccording to Cathy Clark at CASE, a third of financials is now offering impact investing as a service. That isbeyond the traditional 20% tipping point, but they are offering it 'exclusively'. They are creaming markets which hinders (exponential) growth tremendously and is a major barrier to achieving the Monitor Institute optimistic predictions for 2020 in their report for the Global Impact Investing Network (GIIN.org)5.

5 The Monitor Institute Investing for social & environmental impact http://monitorinstitute.com/downloads/what-we-think/impact-investing/Impact Investing (pdf)

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But if you look beyond the data of the's GIIN's annuals survey, you will see the markets for investing with impact are doing great and growth is abundant.

The global Green Bonds market is expanding rapidly since private markets discovered it's publicly listed favored funding and now amounts to 700billion US$. It aims at 100billion US$ issuance this year. The first Green, Climate Bond dates back to 2007, when you realise that it took microfinance 40 years to reach 80+billion US assets under Management globally, of which a third is international investments, this is very promising.

Uridashi, Japanese Impact Bonds for development in South Aast Asia and Africa, and Reconstruction afterthe Tsunami, have been around since 1994 but started to grow rapidly since the Millennium. At the end of 2015 the Uridashi Bond Market was over 33billion US$.

Over 5billion US$ has been raised by the International Finance Facility for Immunization for Vaccine Bonds which fund vaccine programmes in the poorest countries. And are said to have halved child mortality the last 20 years.

The UK government has been nurturing social investment since 2000 and the Bostons Consulting Group's guestimate for social investment in the UK in 2016 is already surpassed by 50%6 as it reached 1,5billion UK£. Fortunately the UK introduced it at G7 level in 2012, initiating a Social Investment Taskforce which is now lobbying at OECD level.

Social Impact Bonds, a 2009 British invention are going viral, counting about a 100 operational / being structured and they are broadening their scope to Development Bonds. The operational market justsurpassed the 200 million US$ mark7. A guestimate for the next 2 to 3 years is doubling those numbers asJapan just announced a 200million US$ budget for Social Impact Bonds.

6 Big Society Capital Social Investment Across the World (March 2016) https://www.bigsocietycapital.com/sites/default/files/attachments/Social%20Investment%20Insights%20-%20Retail%20social%20investment%20across%20the%20world_0.pdf 7 http://www.socialfinance.org.uk/social-finance-launches-social-impact-bond-white-paper-and-global-impact-bond-database/

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Another British innovation 'Charity bonds' raised 87million UK£ since inception in 2003 of which 50milionwas raised in 2015. The EU will dearly miss the UK's leadership in social investment....

(Financial) People like transparent, certified & verified financial products & instruments. But especially withclear environmental or social goals & impact. For now inclusive impact investing opportunities, for house-holds, remain scarce with the exception of a few first movers. We see flirtations of traditional finance with online crowdfundingplatforms as part of layered financing strategies. The foundations are there, it is time to accelerate the impact investing market by opening it up to the people. With impact vouchers for households. It will add another layer to the social investment pie ….

Copy, Paste & Roll OutWe can wait, let impact investing, climate & social investing and financial innovation take it's course. Awaitthe OECDs further research on Social Impact Investment Evidence8. Await track record building efforts andthe creaming of the market process. We can thus repeat the decades long evolution of responsible (exclusion), social and sustainable investing (ESG risk integration) to ESG opportunity and impact investing. Or we can speed up the process building on existing frameworks, tools and expertise.

Eligible Impact InvestmentImpact vouchers could be used for investment products labeled as having social & environmental impact. Such as the French Finansol labeling system which it is trying to introduce the label in Belgium, but finds that hard as 'the institutional system and finance regulations are different everywhere. Uniform introduction in Europe would slash that barrier and would stimulate savings and investment products developers, big and small, to qualify for labels and offer SMEs and social entrepreneurs easier andcheap(er) access to capital. That requires a low threshold for Small & Mediumsized Enterprises (SMEs) based on core activities, employment, and sustainable operations9.

8 OECD Social Impact Investment Building the Evidence Base (2015) http://www.oecd.org/sti/ind/social-impact-investment.pdf 9 Such as in Spain's SME Impact Bonds issued by ICO https://www.ico.es/web/ico_en/press-release/-/blogs/ico-launches-first-issue-of-social-bonds-in-spain-for-1-billion-euros

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Evolving from ESG to SDGAn impact label would stimulate large (listed) corporations to move beyond ESG goals, green bond financing or for instance Unilever's 2014 Sustainability bond to finance is Vision 2020 strategy for a Sustainable Living Plan.

Corporations could aim for the UN's Sustainable Development Goals (SDGs) as the new key performance indicators to reach for10. Impact vouchers would create a new market and demand for such investment products.

There are many more examples of existing financial products I could champion to build on and learn from.But to quote Caroline van Leenders (the Dutch government appointed manager for the transition of the Dutch financial sector towards sustainable finance) it boils down to one catalyst, the age old agadium:

'where there is a will there is a way'.

THE POLITICS OF IMPACT INVESTING If you think that in the political arena economic growth and social & environmental impact can't team up on the highest political level ... The Netherlands has a coalition cabinet of Liberals pursuing economicrecovery & growth and Socialists pursuing social & environmental impact for 4 years now. They are restructuring, reforming and achieving results.

Yes it hurt, yes we have to many people out of work, and worry especially about youth unemployment andthe 50+employees laid off since the financial crisis. Our health and care systems are going through a painful transition process and our investments in climate change are embarrassingly near Europe's micro states Luxembourg and Malta.....

10 Sonen Capital, a San Fransisco based impact investments asset manager developed a model for impact evaluation integrated with the UN's SDGoals. As an other follow up of their impact measurement portfolio model presented at WEF Davos in 2014. http://www.sonencapital.com/thought-leadership-posts/2015-annual-impact-report/

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But the Netherlands is getting in better shape economically and more future proof facing aging, populationdecline and resource scarcity. But also closer to the desires of our Millennials for happier, healthier & sustainable living.

Our youths, some of the globes best educated, cosmopolitan and globally aware citizens, in majority want investments to go beyond financial returns. To take into account social and environmental impact. If we can do that we can also invest for positive social & environmental impact and move beyond primarily avoiding ESG risk as financial markets are doing faster and faster.... Impact vouchers would speed up the market for ESG opportunity and impact investing.

POPULAR SUPPORT?And the people? Are they supportive? Are they ready for it? Well they embrace crowdfunding and other fin tech innovations to finance renewable energy to slow down climate change and make social and culturalinvestments for cohesion, health and wellbeing.

The 2015 Dutch crowdfunding market saw 20% societal & cultural investments. And another 11% forrenewable energy11. If only a third of all traditional investments went to societal & environmental goals!Crowdfunding for impact is not a mere national affair: one of the fastest growing Dutch platforms lends money, from as little as 100euro and up, to SME entrepreneurs creating employment in developing countries12. Because people do care and do believe they can make a change. We all can, step by step and if we all do it, it will be a huge step for mankind.

Dutch people saving for their retirement budget through pension funds keep voicing their preferance for sustainable and responsible investing. Their asset managers, institutional investors, are trying to adhere. But still with marginal percentages for responsible and impact investments, slowly expanding their ESG risk universe or a shake down of poor ESG performers13.

11 Retrospective research for Rijksdienst voor Ondernemend Nederland by Douw&Koren12 Www.Lendahand.com works with local MFIs in the Philippines, Ghana, Colombia and Mongolia. 13 See annual (sustainable) investment reports of APB https://www.abp.nl/english/about-us.aspx PGGM

https://www.pggm.nl/english/what-we-do/Pages/Responsible-investment.aspx PFZW https://www.pfzw.nl/over-ons/Paginas/paginas-homepage/We-zetten-ons-vermogen-in-voor-een-leefbare-wereld.aspx etc.

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Giving households impact vouchers and stimulating the impact investment market can encourage institutional investors further to utilize their knowledge and experience with responsible and sustainable investing and speed up their present actions and ambitions.

IT'S THE MARKET(ING) STUPID!Let governments invest in governance, security and basic needs. And let the people invest for the people, for the future of their children, their kin, their neighbors and their fellowmen. The people choose governments they put their trust in, surely they can also choose economic activities they want to support directly through impact vouchers.

Impact vouchers give democracy double popular support: not only a vote for political parties, politicians and their goals and agenda's, but also for societies investment agenda, it's priorities and actual choices.

About the author: Drs Alcanne Jeichien Houtzaager MA holds degrees in Political Contemporary History (University of Utrecht/Groningen) and Politics of Alternative Development Strategies (Erasmus International Institute of Social Studies, The Hague) She worked in charity marketing & fundraising for 20 years (health foundations & faithbased international aid, development & missionairy work). Moved impact investing in 2011 with a focus on inclusive impactinvesting, as a next step development strategy effectively combining philantropy, politics & investing to tackle local and global challenges. https://nl.linkedin.com/in/alcannehoutzaager

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