Private Capital, Public Good

Building shared prosperity to create a resilient and inclusive economy

The United States continues to be a country with tremendous economic prosperity and possibility. But this prosperity is not shared equally among Americans; longstanding wealth gaps impede progress for too many communities across the country. Impact investing can help to close those gaps and build shared prosperity.

This report includes discrete bipartisan recommendations for how the Administration and Congress can play a leadership role in creating shared prosperity for all Americans. Acting on these recommendations will require leadership across the federal government, bringing together different departments and agencies to work towards shared goals.

The U.S. economy had among the fastest and strongest recoveries to the economic shock caused by the COVID-19 pandemic, supported by strong federal response efforts, innovative local partnerships and robust private investment. This has led to a strengthened job market and high consumer spending. Through public-private partnerships, bridges, roads and factories are being built across the country to accommodate the needs of a growing population and to reinforce American competitiveness.

However, many communities still do not receive the kinds of long-term, sustainable investment in housing, community facilities, small businesses and quality jobs that will be needed to drive our country’s economic vitality. For many, the American dream feels increasingly out of reach due to the rising costs of living, stagnant wages and lack of opportunity for mobility.

We are confident that impact investors will rise to the challenge, but they need federal policymakers to play their part as well. That includes continuing to champion bipartisan federal policies that make it possible for private investors to harness American capitalism to address serious systemic challenges.

Summary of Recommendations

I. Protect and Strengthen U.S. Economic Competitiveness

  • Congress should create greater opportunities for investment in community development, sustainable infrastructure, renewable energy and thriving industry to support America’s role in a thriving global economy

  • Congress should build on bipartisan momentum to address impediments to the growth and scale of employee ownership models

  • Congress and the Administration should work together to ensure that capital and resource flows to underinvested communities are well coordinated

II. Fortify Community Investing

  • Congress should extend and improve community investing tax programs, ensuring they are transparent and accountable and that incentives align with positive community priorities

  • Congress and the Administration should strengthen and scale Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs)

  • Regulators should continue to protect and expand the provisions of the Community Reinvestment Act (CRA) intended to serve historically underinvested communities

  • Congress should continue to make new capital available to small businesses, particularly in historically underinvested communities

III. Enable Greater Impact Transparency

  • Regulators should ensure that both public and large private companies, as well as major asset managers, have clear, consistent disclosure requirements on sustainability and other material economic, social and environmental impacts

  • Regulators should clarify investors’ duties as fiduciaries and rights as shareholders, clearing the way for investors to consider the long-term financial materiality of impact factors

 

Join the conversation on LinkedIn

Follow us on Twitter