Written by David Wood, Ph.D, Director, Initiative for a Responsible Investment
On July 1st the Initiative for Responsible Investment (IRI) co-hosted a meeting with the ICIC to explore the potential role of the EB-5 program to increase economic opportunity in distressed communities. The EB-5 Immigrant Investor Program, a relatively obscure and sometimes controversial program was introduced in 1990 to attract foreign investment in U.S. markets. The program links investments that generate documented job creation to conditional permanent resident status for foreign investors and includes incentives for those foreign investors to invest in distressed communities.
The day-long event built on ICIC’s recent excellent report on the EB-5 programs impacts, strengths and challenges. We concentrated not on the sources of the EB-5 investments – though that obviously came up! – but on how to maximize the social impact of those investments.
From the IRI’s perspective, this was a great opportunity to rethink how this program might be made more effective in promoting community investment. EB-5 is a frequent topic of discussion in the impact investment community because of its potential to provide flexible, patient, or risk-bearing capital from investors who are interested in outcomes beyond their financial return. The day also opened up a discussion about the relationship between public policy and impact investment, a topic the IRI has been studying for some time.
Three things that the day’s conversation and ICIC’s research reinforced:
I left the day thinking that there is a great deal to work on. The ICIC has done a service both in publishing the report and in bringing together stakeholders from the public, private, nonprofit and philanthropic sectors with EB-5 practitioners as an important step towards raising the bar on the social value of the program.
David Wood directs the IRI’s research and field-building work on responsible investment across asset classes, and currently manages projects on RI strategy with pension fund trustees, mission investing by foundations, the changing landscape of community investing in the US, and impact investing and public policy. Prior to joining the IRI he taught the History of Ethics, including the History of Economic Thought and Human Rights, at Boston University. He holds a Ph.D. in History from The Johns Hopkins University.
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