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New Guiding Principles for Opportunity Zone Investors

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Written by: Heidi Bush, CFA

The U.S. Impact Investing Alliance and the Beeck Center at Georgetown University have authored a paper outlining a framework for Opportunity Fund managers entitled Prioritizing and Achieving Impact in Opportunity Zones.

The framework provides guiding principles for investors to combat economic inequality and barriers facing low-income and underinvested communities while avoiding unintended outcomes (such as gentrification vs. generating community benefits). The paper outlines a reporting framework that helps fund managers provide effective information to encourage market formation and enable community engagement before and during investments. The authors and contributors also highlight a method for impact measurement and reporting to track transaction level data along with community impacts and metrics. Responsible exits and outcomes reporting are discussed as well.

“The best investments in Opportunity Zones will be firmly rooted in local context and will engender local champions by being responsive to community priorities or input,” says Fran Seegull, Executive Director of the Alliance. “The framework is meant to guide all of us working in this new market – investors, local leaders, fund managers and others – through that conversation so we can lift up and amplify best practices around the country.”

Related: Investing to Sustain Innovation

For more details regarding Opportunity Zones, and the questions regarding these investments, please refer to our recent report, “Opportunity Zones: Positive Intentions, Many Questions.”

While there are still many questions regarding Opportunity Zones which will not be answered until the final rules for Opportunity Zones are announced by the U.S. Treasury and the IRS, investors might lay the groundwork for their investments by utilizing this framework so they can prepare to invest effectively when those rules are issued. 

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