Giving Compass' Take:

• John Duong explains how Lumina Impact Ventures supports the higher education efforts of Lumina Foundation. 

• What could impact investing do for your philanthropic mission? Are you ready to transition to impact investing? 

• Read the essential guide to impact investing for small foundations. 

How does Lumina Impact Ventures support the work of the Lumina Foundation?

Lumina Foundation is the largest private foundation focused exclusively on higher ed. Traditionally we operated like most foundations, in terms of making grants to causes that align with our mission. These typically are nonprofit organizations.

We started doing impact investing back in 2010 through our fund investment strategy and invested in a couple fund managers. The hope then was that we would be able to catalyze more investors into the education space. Back then, there weren’t that many groups—one or two at most. New Markets Venture Partners was one of the early ones. Today, there’s a lot more.

Lumina Impact Ventures was an evolution from investing in funds into doing direct investments in companies. This is a shift in how we think about partnering with entrepreneurs, by leveraging technology services and products from them and partnering with other stakeholders that traditionally have not been what Lumina has worked with.

Describe the recent investments and how they tie into Lumina’s broader mission.

The foundation side focuses on policy, at the state and federal levels, working with employers and higher-ed institutions, trying to change the learning infrastructure and ecosystem. We also work and engage with local communities to develop talent pathways.

On the investment side, we try to figure out where we can plug in to those various initiatives. With the learning infrastructure work, for example, we have Credly, our very first investment that is working on digital, competency-based credentials.

We also focus on data interoperability. When you think about government agencies and higher-ed institutions, they all have disparate datasets that don’t talk to each other. So we invested in a company called BrightHive to essentially make that dataset interoperable.

Then we look at student support services. Upswing is another company of ours, which is serving the community college sector by providing student support services like tutoring, and nudging tools to remind students when their financial aid forms are due. All of these different pieces align with Lumina’s mission of ultimately increasing attainment in the higher ed space.

We also try to support entrepreneurs of color. Six out of our 11 companies are led by entrepreneurs of color or women. This is very important for us given the demographic that we’re trying to serve.

Read the full interview with John Duong about using an impact investing arm by Tony Wan at EdSurge.