The Mission-Driven Venture: Business Solutions to the World s Most Vexing Social Problems

Chapter 11How Impact Investing Works—and Why

LeapFrog Investments is often described as the first microinsurance fund, and its ambition has never waned. When it was launched in 2008, the company set out to insure more than twenty-five million people in its first ten years, focusing on the lowest income areas of Africa and Asia. LeapFrog hoped to provide a measure of financial security to people who never knew what that meant. Its initial backers included J.P. Morgan and TIAA-CREF, and it was recognized at the 2009 Clinton Global Initiative as it began to take off. Bill Clinton himself called LeapFrog the “insurer to the poor.” As of April 2014, LeapFrog Investments is a $300 million fund, vowing to provide financial services for “the next billion” consumers who never before had access to financial services.

But LeapFrog does not directly provide financial services at all. Rather, it helps fund financial services companies that do, never losing sight of the risks it takes on. Among its first investments was a $6.7 million stake in AllLife, a life insurance company providing insurance to people living with AIDS or HIV. The investment would come with this expectation: that the insured submit to regular blood tests to verify that he or she was taking anti-retroviral drugs as prescribed. This small measure of due diligence illustrates the many steps LeapFrog takes to improve the odds that its impact investments will work, both financially and socially. The company's management begins ...