It's in the Name: How the Sorenson Impact Foundation Pursues Opportunity in Impact Investing

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Impact investing still generates some sector buzz, but it’s no longer the shiniest new thing in philanthropy. While some big grantmakers continue to make waves pushing large portions of their assets (sometimes all of them) into program- and mission-related investments, there’s good reason to believe momentum has slowed. When the Sorenson Impact Foundation got started back in 2012, impact investing advocates were probably more bullish than they are today. But that hasn’t stopped the foundation from continuing to enthusiastically embrace and evangelize impact investing.

The foundation has its roots in a medical equipment fortune. Coming of age during the Great Depression, James LeVoy Sorenson’s career took him from selling medical supplies to inventing them, including by creating the first disposable surgical filter masks. He sold his medical equipment company, Sorenson Research, to Abbott Labs in 1980 for $100 million in stock. That was worth $2.7 billion in 2007, a few months before he died at the age of 86. His eight children inherited his fortune, with the family’s net worth pegged at $1.8 billion by Forbes in 2015.

Son Jim Sorenson has followed in his father’s entrepreneurial footsteps. In 1995, Sorenson founded Sorenson Media, a leader in video encoding and streaming tools. Sorenson Media has been instrumental in bringing internet video to Quicktime, and Sorenson Media's encoding technology has been used for website trailers for Disney, Lucasfilm, MGM and Paramount. Sorenson also cofounded Sorenson Capital.

The larger Sorenson Legacy Foundation, founded by the elder Sorensons, continues to honor the legacy of James LeVoy Sorenson, with grantmaking across areas like education, healthcare and the arts. Then there’s the Sorenson Impact Foundation (SIF), founded in 2012 by Jim Sorenson and his wife Krista Sorenson. The foundation takes a strong impact investing approach to philanthropy and came of age just when the space was kicking off.

SIF focuses on investing in both nonprofit and for-profit projects that have measurable impact. Meanwhile, its grantmaking involves antipoverty causes, education, entrepreneurship, healthcare and more. I recently caught up with Jim Sorenson about SIF and its latest work, including a focus on its 2024 grants toward investing in the ownership economy. Along the way, I also learned more about lessons in philanthropy Sorenson learned from his father, SIF’s work stateside as well as abroad, and his biggest hopes for impact investing going forward.

From parents to son

In 2007, the year before James LeVoy Sorenson passed away, he bequeathed his entire fortune to the Sorenson Legacy Foundation. In a recent year, the larger foundation held nearly $450 million in assets. His wife Beverley, meanwhile, was an education and arts advocate who promoted legislation to integrate arts into elementary education. Through the years, the foundation has given major support to University of Utah, Southern Utah University, Church of Jesus Christ of Latter Day Saints and Kingdom of God, Utah Valley Healthcare Foundation and Brigham Young University.

“I think I’m a combination of my parents,” Jim Sorenson said in a recent interview. “My father was a very successful entrepreneur… And later on in his life, came to philanthropy. I don’t think he had a specific strategy around it.” Sorenson said both of his parents instilled in him the values of advocating for the underdog.

The younger Sorenson, meanwhile, made a big business splash during the dot-com boom. But when things burst, he had to pivot. At the urging of his deaf brother-in-law, he decided to take the tools he’d been working on and bring them to the deaf community. He went on to launch Sorenson, a global language service provider that is now the world's leading communication service for deaf and hard-of-hearing people. “I found myself being referred to as the Alexander Graham Bell of the deaf. I don’t know if it was warranted. But certainly it had great impact,” Sorenson said. He added that, anecdotally, he’s heard that his service improved the employability of the deaf by a factor of four — not the only time in our conversation Sorenson used metrics to back his convictions.

At this point, Sorenson said, he had an a-ha moment: He could address social problems as a for-profit business with access to private capital, while also making that enterprise self-sustaining and scalable. This, he believes, is how to really move the needle on the most intractable problems around the world. It also set the stage for Sorenson’s two decades and counting of work in the impact investing space.

Moving toward 100% mission alignment

Today, Sorenson moves a range of business and social impact endeavors through an umbrella organization called Sorenson Impact Group, which looks to align the aims of market-rate investors and “purpose-first” investors, as Sorenson calls them. Under that umbrella is the Sorenson Impact Foundation, launched in 2012. Sorenson said the foundation is a “little bit different” than most foundations in that one of its main aims is to build, promote and facilitate an ecosystem for impact investment. The foundation’s first years, he said, were a bit of a wild, wild west.

Sorenson leaned on other business models and sectors, particularly diving into microfinance, banking services for low-income individuals and groups, and financial inclusion. Guiding the foundation’s work are the 17 Sustainable Development Goals (SDGs), which include eliminating poverty, providing clean water and sanitation, and creating sustainable cities and communities. One of the foundation’s early partners was what is now known as Elevar Equity, which focuses on India and Latin America, and backs businesses that work with underserved customers and households who lack access to products and services. Elevar says it has backed 50 companies which have served over 50 million households. “They’re on probably version five of their funds and they’ve grown and had great influence in that space,” Sorenson said.

Meanwhile, to help build an ecosystem for impact investment, Jim Sorenson also endowed the Sorenson Impact Institute at University of Utah within its school of business. His hope is to engage students while also using the institute as a way to find new social entrepreneurs.

The core of the Sorenson Impact Foundation’s work comprises program-related investments (PRIs), which Sorenson said make up about 60% of its grantmaking. The big difference between PRIs and many of the grants we talk about at IP every day is that when foundations award PRIs, they expect to get the money back by a specified time, usually at below-market interest. This is appealing to recipients in that they get access to capital at a lower rate than may otherwise be available for them. “Early-stage, concessionary, risk-taking capital is so needed for those social entrepreneurs that get their businesses ready to the point where they can take on market-rate capital,” Sorenson said.

The foundation has gradually put more and more of its funds toward impact investment over the years. Sorenson said that this steady rise happened because of the advisory expertise (it has been able to lean on an investment committee of nearly a dozen). By 2017, 25% of the foundation’s corpus was in impact investments. The following year, 50% of the foundation’s corpus was aligned with impact. And since 2020, the foundation has been 100% mission aligned. SIF also boasts an advisory panel to show this model to others in the sector. Again, Sorenson’s goal here is to create an “ecosystem.”

Investing in the ownership economy

This year, SIF has put a greater emphasis on the ownership economy — investing in strategies that advance home ownership, commercial real estate, stakeholder trusts, employee ownership and broad-based entrepreneurship. Sorenson said that he was driven by the declining rate of ownership in the U.S. — whether that be a home, a company, or even other benefits like a 401k or a managed plan. “Those are all passive wealth-building opportunities that at least I had a different experience with than what future generations are having now,” Sorenson said.

Sorenson mentioned BlackRock’s letter from Larry Fink titled “Time to Rethink Retirement,” and how institutional investors, along with foundations, family officers and others need to provide an onramp for ownership. He highlighted one investment he’s made for those who don’t qualify for a down payment — using appreciating home equity to sell a portion of the appreciating future equity of their home to fill the gap in the down payment. “That is a clear example of how you’re utilizing and monetizing a $31 trillion asset class of home equity to basically benefit those who wouldn’t have the opportunity to have ownership.”

As another example, he mentioned the possibility of gig workers having access to a 401(k) and a proposed federal policy to achieve that. Sorenson himself has been involved in some of these fights on an individual level, but clarified that the foundation has not. The foundation has, however, supported 501(c)(4) organizations like the U.S. Impact Investing Alliance, which engages in advocacy work.

Sorenson Impact Foundation is looking to write bigger tickets this year and put out an RFP that looks beyond traditional nonprofit grants to include for-profits through innovative deal structuring so they can address declining rates of ownership at scale. “We’re open to innovation that may be different than a typical grant,” Sorenson said. “It could be a loan guarantee… but you can leverage in a lot of capital.”