A game of darts brought angel investor John Moore to Philadelphia in 2003. A Harrisburg native trained as an engineer, Moore lived with his family in Wilmington, Delaware, from where his now ex-wife commuted to a job as a portfolio manager in Philly, and he traveled around the world for his job, with the world’s largest manufacturer of automotive leather. They had a nanny for their toddler but, as he (half) jokes now, they were starting to need a backup nanny to accommodate their schedules.
So the Moores did what (no other) working parents the world over do to find a solution: They played a game of darts to determine who would keep their job. Moore lost, and became the primary caregiver for their son. (His wife may have cheated, but he also may have let her because it was the best thing for the family.)
In Philly, Moore became an angel investor for several early-stage startups, which turned into a job as managing partner at Robin Hood Ventures, and a shift towards social impact investing, a practice that pairs good financial returns on investments with socially-good outcomes.
Six years ago, Moore was instrumental in launching ImpactPHL, a nonprofit whose mission is to proselytize social impact investing in Philadelphia. In addition to hosting an annual forum to educate financial professionals about the value of purposeful investing, ImpactPHL has become a critical resource for connecting the dots between making money and being philanthropic, solving social problems and contributing to the system that causes them, living locally and sending money elsewhere.
In no small part because of ImpactPHL, around a dozen social impact funds and investment opportunities have launched in Philly over the last couple of years, more than in any other city in America. Moore’s work launching ImpactPHL has landed him on The Citizen’s Generation Change Philly list, a partnership with the nonprofit Keepers of the Commons to provide educational and networking opportunities to the city’s most dynamic change-makers.
I caught up with Moore earlier this month to talk about ImpactPHL’s five-year journey. This interview has been edited and condensed.
How did you become taken with the idea of social impact investing?
In 2010, Good Company Ventures was having their first first cohort, and there were going to be a dozen social enterprises coming out of that. And [SustainVC Managing Principal] Tom Balderston and some others thought it would be great if we had angel investments going into those companies, so they launched Investor circle Philadelphia, and I joined them. So over the years, I have shifted my focus toward that.
There was a moment around that time where my wife and I — both college educated — had retirement plans started; we had 529 [college savings plans] started; we had what we felt was a comfortable lifestyle. And I started to think, how does my life get better? And really, a lot of it depends on Philadelphia, like how vibrant is Philadelphia? What is this city?
The thing that’s beautiful about impact investing is it helps everyone. It’s this idea that you don’t have to just donate your money, and then feel good about it, like, make a bunch of money over here and donate it over here; that impulse can be combined.
And I was also just really interested in the power of entrepreneurship to solve social problems. There’s a guy named Jimmy Chen, who started Propel, who came to the Good Company incubator. He looked at SNAP benefits, and what an archaic system it was to actually sign up for them, and how that did not fit at all with the customers that they were trying to service. So he figured out that it made sense to partner with the store owners in these areas who would benefit tremendously if their customers all of a sudden had an extra $50 worth of disposable income to spend at those stores.
That’s the kind of stuff that entrepreneurs think about. When everybody else looks at something as a problem, an entrepreneur seizes an opportunity. And they figure out a business model that can serve that opportunity and at scale.
I recognized that there’s a movement happening here, and that Philadelphia is uniquely positioned to be a leader in the space.
In what way?
Well, for example, the B Corp movement started here. Why? Some people say it started here because [founders] Jay Coen-Gilbert and Bart Houlahan lived here. But that’s only part of the story, right? What people may not know is that [local businessman/philanthropist] Harry Halloran was one of B Lab’s earliest investors. He was in Philadelphia, and they found funding in Philadelphia to get their big idea off the ground. Harry also started SOCAP [a convener for social impact investors]. Media-based Untours was the first B Corps; their lawyer, Bill Clark, from Drinker Biddle, wrote the language for the B Corp movement that’s being used in 40 states and six countries is here.
There’s some of the stuff that Judy Wicks did here in Philadelphia early on. I mean, people don’t know this, but she was responsible for bringing the sustainability movement to the East Coast.
And then we have the fact that eds and meds is one of our strengths as a region. And that’s inherently impact-oriented. We have all these young people coming to our city, and a lot of them are learning about social impact; Wharton now has the aim to be the biggest name in social impact education.
We have Ben Franklin Technology Partners, which is in the top 10 most active early stage investors in the country. It’s intense to think that that’s in Philadelphia, right? Nobody would think that. We have PDIC, a unique blend of public-private capital that’s doing impact investing; the Reinvestment Fund [founded by former Citizen chairman and ImpactPHL advisor Jeremy Nowak] was one of the first and still one of the most innovative at impact. They’ve been doing it for decades.
And then there’s also a piece where people just care about Philadelphia. You see our passion on Broad Street after sports teams win, right? That’s maybe misdirected in some ways. But it’s also indicative of how people feel about the city: People come here, and they stay here. Compare that to Washington, D.C., and the turnover that you have there. And even New York — there’s a competitive nature in New York that you don’t necessarily have to have in Philadelphia. You can survive without being so competitive, so it leads to the collaboration piece of it.
That’s such an unusually rosy view of Philadelphia, which is framed so much in terms of all of its problems. But you view it, at least in this particular area, through a totally different lens.
It’s so typical of Philadelphia to think, Oh, well, B Lab just happens to be located in the suburbs of Philadelphia, there’s nothing special about that. But if you look at these other pieces that came into play, that actually happened to get that movement going, you can see why that’s unique to Philadelphia, right? That’s part of our culture of under-appreciating ourselves.
When we were forming ImpactPHL, we recognized that there’s going to be a lot of capital that’s seeking impact. But the market — the financial models of advisors, and fund managers, and all those things — are not really set up to manage that, and especially not set up for local investment, investing in a place where people really care about. Most of people’s philanthropy is within a certain radius. But their investments are not; their investments are all funneled through Wall Street and national or international funds and managers. And so, if Philadelphia could find a way, and could accelerate the activity that was happening and become one of the places where all of this activity happened, that money could flow into Philadelphia.
And so not only is it economic development capital, because that’s being invested in Philadelphia, but all that capital is seeking some social and environmental outcomes. And some of those outcomes will be direct benefits to our region.
First Step Staffing is a fantastic example of this. It got $300,000 from the Barra Foundation to kick it off, and then a $7 million impact investment. I participated in that and got a decent financial return — and there are over $85 million wages paid to people, all of whom had experienced homelessness or incarceration in the previous 12 months. There were some really key people that saw the value of that and actually made it happen here, by recruiting First Step into Philadelphia and facilitating that happening. Thinking about what that $7 million created in terms of financial returns is one thing, but the impact piece is just through the roof. If we can do that 10 times, 20 times, 100 times …
The thing that’s beautiful about impact investing is it helps everyone. It’s this idea that you don’t have to just donate your money, and then feel good about it, like, make a bunch of money over here and donate it over here; that impulse can be combined.
I’m a big fan of capitalism, because it encourages productivity like no other system that I’m aware of and it allocates resources more efficiently in a lot of ways. But the way a lot of people win at capitalism is by externalizing some cost on to others, or using resources in a way that’s not sustainable. So it excites me to think about how we can change capitalism to do it differently, like capitalism 2.0 kind of thinking.
To succeed at that, you have to convince other capitalists like you that there’s an upside for them. How do you do that?
I have this premise that investing in startup entrepreneurs that have a social mission could be financially more profitable than not. And I believe, if you’re trying to recruit and retain talent, that you have an advantage if you have a mission that employees care about. Customers are also attracted to this. You still have to compete on quality and price and everything else, but if everything else is the same, and the company is doing positive things, it has a stronger brand. And as a result of that, you can attract customers and other stakeholders.
I’ve seen a lot of examples of that. I was an early investor in Wash Cycle Laundry. [The founder] Gabriel Mandujano is an unbelievable entrepreneur; he could be doing many different things in the world. He’s dedicated to a social mission, and started a laundry company so that he can employ people. Early on, he got a meeting with Drexel through their procurement department that included President John Fry, who had invited the head of every business unit at the university to attend. And John Fry asked them: Is there any place within the university that could use Wash Cycle? At the time, it wasn’t even a million dollar company. No other company at that size could get that meeting without the mission around employment practices that he has.
People just go out of their way to do things for companies, and entrepreneurs, if there’s a mission that they believe in. And then these companies have access to capital in ways that other companies don’t, and cheaper capital — so sometimes the terms are different; if it’s a loan, maybe the interest rates are lower, or the duration is longer, or the payment terms are different. If it’s equity, it can be more patient. Sometimes it can be structured as revenue-based financing instead of a straight up equity deal.
Another example is QR pharma, which is now Annovis Bio. Maria Maccecchini purchased a compound that was addressing Alzheimer’s and Parkinson’s disease. She’s the most tenacious entrepreneur I’ve ever met. But for almost a decade, she just bootstrapped this company and kept it alive. And it was interesting, because I had conversations with Robin Hood Ventures members, and they would say, I’m not an impact investor; I’m looking at the financial returns. There was almost like a stigma around it.
I’m a big fan of capitalism, because it encourages productivity like no other system that I’m aware of and it allocates resources more efficiently in a lot of ways. So it excites me to think about how we can change capitalism to do it differently, like capitalism 2.0 kind of thinking.
Then recently, Maria was raising another round of investment, and this time, I heard people in the room saying, like, This is probably not going to work out; the odds of this actually curing Alzheimer’s is very, very low. But if it does, think about what they can do for society. And a couple people had some experiences with family members. And now they were saying, You know, I’m going to take a risk that I wouldn’t normally take because of the social outcome potential for the investment.
So they still are not going to say that it’s social impact investment because there’s some feelings around that. But the motivation was there.
I think the financial industry is also rightfully nervous about promising impact and having to deliver on that. How do you do that? How do you measure it? I think there’s a really interesting role for philanthropy to play in that, specifically foundations who have lived in the world of measuring impact of that. Let’s say you had $100 million, and an impact fund to deploy. And Philadelphia’s philanthropy world said, if you deploy it in Philadelphia, we will measure it, and we will report it for you, we will collaborate with you. And maybe it costs the foundation some money to do that but it’s win-win: You have that money flowing in, and that could be transformative.
When ImpactPHL started, the notion of social impact investing was new enough that you had to educate people about what it even was. Now Philadelphia is home to some 12 impact investment funds that just launched in the last couple years. That must be super gratifying.
It is, because we can see some of the links to ImpactPHL’s activities. We’re trying to help people understand the opportunity that Philadelphia has. This is a moment where whoever is ready to accept this impact capital — whoever has pipelines developed — could actually benefit. There aren’t a lot of places where you can invest locally, and there’s not a lot of mechanisms for that. So we could become the place where everybody invests locally.
The other thing that I would love to see happen is the whole city recognizing this opportunity, and coming together, like we did for Amazon [HQ bid], and saying strategically, How do we make this happen? What if the next mayor recognized how powerful a Philly invested in Philly would be as a development opportunity and drove all that money into the region? How do we as individual organizations, but also how do we connect to other organizations, to really drive this as a strategy? It would change the culture of our city dramatically. It would change the economics of our city. And it could address some of these systemic issues that we’ve been dealing with forever.
A lot of the work of ImpactPHL and what you’re talking about involves individual conversations with people, one person after another after another. And so you probably have had dozens, hundreds, of these conversations. Have they changed over the last six years?
Oh, for sure. Because there’s a tailwind in this space. Larry Fink sending out letters about stakeholder capitalism is a game changer. Climate change is in everybody’s face. The Black Lives Matter movement, especially in Philadelphia, made people think: how can this city thrive if such a large part of our population doesn’t have access to capital, doesn’t achieve its potential? People started sort of waking up and being like, holy shit, now, I finally understand this divide, that I’m on one side and there are people on the other side. How can I use what I have, which is my capital to speed up some of this.
And now we are starting to see that there are financial advisors who are doing the work to align assets with mission. So there’s momentum around changing that.
You know, we talk about the opportunity that we have in a couple of years to celebrate 250 years, from the Continental Congress coming and tinkering with democracy. I’d love to think about how to strategically position ourselves as working on capitalism.
Like a Capitalism Congress?
Yeah, and what if what comes out of that is, like, a constitution about what capitalism should be over the next 250 years of America. We could be the conveners of that. I used to give this speech that referenced the speech that Ben Franklin gave during the Congressional Convention [in which he looked at a carving of the sun on President Washington’s wooden armchair, and wondered aloud if it was setting or rising on the new country], in which I asked if at this moment the sun was rising or setting on capitalism.
I think we’re changing this, and we’re doing it with impact. So, you know, I think it’s rising.
The Philadelphia Citizen is partnering with the nonprofit Keepers of the Commons on the “Generation Change Philly” series to provide educational and networking opportunities to the city’s most dynamic change-makers.
