Although 50% of American GDP is generated in and around 21 metro areas, the other 50% is what makes that urban industry possible.

Rural America is where the food for hundreds of millions of people around the world is grown and processed.

The vast majority of American energy, including basically all natural gas, oil, petroleum distillates, biofuels, coal, uranium, hydroelectric, wind, solar, and geothermal, are found and produced in rural places.

The same goes for essentially all commodities, production, and 99% of all water that is used, in one form or another, in every community, by every person, every day.

The rural west is valuable. It is our home. And it’s success is vital to the success of global markets.

Rural Asset Replacement Fund (Alpha)

Conservative Approach

Investments in asset-backed term notes of small and medium U.S. 501(c)3 Public Charities with strong balance sheets; stable, long-term cash flow; and proven management.

Modest Returns

The target annual return of the fund is 3.1%, equivalent to five-year jumbo certificate of deposit plus a risk premium.

Significant Impact

Many nonprofits have “stuff” that can wear out, from roofs at community centers to refrigerated trucks for food banks. Replacing this “stuff” gives caring people the means to produce significant results for communities.

i3 Investment Principles

PRIORITIZE IMPACT

Beyond financial return, the most important measure of an investment’s return relates to the impact it achieves. Impacts are always external to the investee and directly reflect the causal reality of an investment’s social (or environmental) objectives.

PROVIDE BLENDED RETURNS

The premise of impact investing is that investors, with multiple objectives, can achieve both financial and social returns through a portfolio reflecting the blended value and mixed purposes of all investees. Success can be achieved only if financial and social returns can be generated at the same time.

EXPAND MARKETS
Amid increasing constraint of philanthropic resources and public expenditures (due to investment impediments such as transaction cost imbalances and asymmetrical information) there is a growing demand for capital to fund expanded community need. i3 will utilize impact investing strategies and tools to provide communities access to previously unavailable investment-grade and near-investment grade capital.
REDUCE TRANSACTION COSTS

i3’s objective is to identify ways to reduce transaction costs for community-scale (smaller) investment. When the cost to deploy $100M is roughly equivalent with the cost to deploy $100K, investors lack a real incentive to understand and actively engage in community-scale projects. While relative costs will always be unequal based upon transaction size, i3 believes smaller investments in rural communities can deliver outsized returns (both financial and social). Finding practices to contain transaction cost is of principal importance.

MANAGE CONTEXTUALLY

To be successful, impact investing requires tools, services, systems and management that is contextually appropriate for a blended value/mixed purpose portfolio.

VALUE QUALITY OVER QUANTITY

We believe that the only way for rural impact investing to succeed is for its fundamental structure to be collaborative. i3 terms this as achieving impact through “scope” (breadth) rather than through “scale” (size).

PRACTICE DATA ACCOUNTABILITY

Impact is impossible to analyze without data. Feelings and impressions are useful; information is vital. Context is even more important.

REPORT REASONABLY

We believe in the value of rigorous analysis, but we also believe that reason must prevail over rigor. Measure what matters most and avoid unnecessarily detailed summarization.

PROVIDE USEABLE OUTPUTS

Measurement is really only valuable if it is actionable. Knowledge with which we can do nothing isn’t all that valuable to investors.