NES Financial Expands Social Impact Measuring Capabilities with Predictive Opportunity Zone Administration Solution

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Howard W. Buffett’s Impact Rate of Return is the first standardization for predicting impact in OZs by looking at the magnitude of social, environmental, and economic impact.

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I am hopeful that building iRR into NES Financial’s Opportunity Zones solution will ensure that funds achieve their impact objectives in communities where they’re needed most.

Specialty financial administrator NES Financial announced that it has expanded its social impact reporting capabilities in collaboration with Howard W. Buffett and his advisory firm, Global Impact LLC.

Buffett, who is also a professor at Columbia University, recognized the need for a customizable reporting tool that would effectively measure the quality and quantity of impact delivered by a project on a per dollar basis. He developed Impact Rate of Return®, or iRR®, as an innovative approach to performance measurement and management that enables organizations to calculate how efficient their financial allocations are at accomplishing social impact in Opportunity Zones across the United States. The iRR formula is modeled after the calculation for Net Present Value.

“Residents and businesses in over 8,700 Opportunity Zones across the United States are counting on investors, developers, and community leaders to bring much-needed economic growth to their neighborhoods in a responsible and measurable way,” said Buffett. “I have spent the last decade-plus developing a methodology and formula to measure social impact, and have worked with clients from all sectors to help them achieve their impact goals. I am hopeful that building iRR into NES Financial’s Opportunity Zones solution will ensure that funds achieve their impact objectives in communities where they’re needed most.”

Qualified Opportunity Zones were created by bipartisan Congressional legislation in 2017 to help incentivize economic development and growth in communities previously overlooked by investors. The initiative has grown considerably, with recently released final Treasury regulations and multiple legislative proposals to provide meaningful reporting.

“Opportunity Zones provide a new incentive to motivate folks in the private sector to invest in low income communities. With cutting-edge measuring capabilities, Opportunity Zone investors can move capital where it is needed most and OZ Funds can achieve the outcomes communities deserve by embracing robust social impact reporting,” said U.S. Senator Tim Scott, who championed the Investing in Opportunity Act and recently introduced the expanded bill on Opportunity Zone reporting requirements.

Opportunity Zone Funds are qualified private-sector investment vehicles that invest at least 90 percent of their capital into Opportunity Zones (OZs) — designated economically distressed areas located across the U.S. The tax incentives associated with OZ funds were developed to foster long-term investment into these areas, with benefits accruing to investors currently and with additional benefits accruing at 5-, 7- and 10-year milestones.

The NES Financial Opportunity Zone Fund Administration Solution is the only purpose-built OZ fund administration solution that addresses all the elements of the program and leverages technology to streamline fund administration to enhance the OZ fund experience and attractiveness for investors, facilitate compliance, and ultimately, help the Opportunity Zones program do the good it was meant to do.

“Impact investors care about real and objective quantitative results,” said Reid Thomas, EVP of NES Financial. “The iRR tool will help fund managers and investors assess social impact in Opportunity Zones across the country and can be easily implemented as part of our current solution, while now providing up-to-date impact reports for OZ funds.”

About NES Financial
NES Financial is a specialty financial administrator which serves sectors characterized by high administrative complexity, increased transaction security needs, and challenging regulatory compliance requirements. The company’s purpose-built solutions streamline the administrative processes of these markets — simplifying specialized financial transactions, curtailing fraud and abuse and helping ensure the utmost in security, transparency and regulatory compliance through each step of an investment’s life cycle.

NES Financial, recognized on the San Francisco Business Times’ top Bay Area fintech list, has defined industry best practices in each of the markets it serves — from 1031 exchanges and EB-5 visa funding, to private equity and the landmark Opportunity Zones program. NES Financial services more than 300 funds, administers over $20B annually, and has worked with more than 700 EB-5 projects. For more information, visit nesfinancial.com.

About Global Impact LLC
Global Impact LLC is an advisory firm that advocates for a more informed, inclusive, accountable, and effective approach for accomplishing greater global impact. The company provides management consulting for impact-oriented program and project strategies, leveraging its proprietary Impact Rate of Return® methodology. The firm has been serving clients for over a decade, and works with organizations spanning the public, private, and philanthropic sectors. The company’s advisory services are based on the Social Value Investing® framework, delivering analysis on the combined financial and social performance of grants and impact investments. The firm utilizes its unique toolsets in order to estimate, track, and report on a broad range of social, environmental, and economic impact.

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