The first round of impact investments has created more awareness of and confidence in the idea of investing for blended financial and social returns. But for impact investing to truly deliver on its promise, it needs to be more deeply rooted in the regions of the world that need it the most—those that abound in social problems and hence in opportunities to create positive social impact.

In October 2012, DFID and GIZ (the UK and German government’s international development organizations, respectively), together with Intellecap, hosted a gathering of some 200 entrepreneurs, impact investors, and other stakeholders in Patna, the capital city of Bihar, one of eight Indian states with the greatest concentrations of low-income people. The gathering marked the first awards ceremony of the Sankalp Forum-Samridhi Social Enterprise Recognition, an initiative designed to identify and showcase social entrepreneurs from these eight states and to make visible the need and potential for impact investments in these parts of the country.

Although the overall number of Indians living in poverty is falling, 65 percent of them are concentrated in 8 of India’s 28 states. In Bihar, more than 80 percent of children under 5 years of age still suffer from malnutrition. Many households lack access to health care, water, energy, and sanitation. Despite this level of poverty, the rate of social entrepreneurship and impact investments in the region is lower than in more prosperous regions of India.

Gatherings such as the one in Patna, however, are few and far between. Today, most impact investors gather in cities like San Francisco, London, and New York, comfortable enclaves that are far from the remote areas where impact investing is most needed. And the conversations among impact investors are all too often about the lack of “ready-to-invest” enterprises, rather than about how to seek out and nurture potential social entrepreneurs in remote regions.

We must redefine what we mean by "skilled managerial talent." Today the definition of “talent” is often biased toward English-speaking people found in urban centers.

Creating lasting social impact in regions like Bihar will require impact investors to shift their attention from a narrow focus on “making an investment” to a broader focus on understanding the social problems within a region, identifying opportunities to make an impact, and bringing together all the ingredients and actors needed to realize these opportunities. This isn’t easy work. It requires impact investors to find new and creative ways to identify entrepreneurs and structure deals that blend public, philanthropic, and private capital to make an opportunity “investment-worthy.” It also demands patience, comfort in the “grey zone,” an openness to experiment, and a willingness to fail.

At the Patna gathering I learned about Akhand Jyoti, an eye hospital that performed 60 percent of the 100,000 eye surgeries done in 2011 in Bihar to cure blindness—an impressive contribution in a region where the health care infrastructure is underdeveloped. Yet there are still an estimated 1.2 to 1.5 million blind people in Bihar who could benefit from surgery. Akhand Jyoti is a nonprofit because that organizational structure allows the hospital to provide free surgeries to low-income people without having to worry about making a profit. But the amount of philanthropic capital available to such initiatives is limited. It is imperative that we find financially viable and scalable ways to extend health care services in regions like Bihar—models that can alleviate some of this backlog faster because they are fueled by impact investments.

How can impact investors amplify or complement the results that philanthropy is achieving? How can impact investors partner with the government to deliver basic services to low-income communities? Can effective partnerships be created that draw on different types of capital, all seeking social impact but having varying appetites for risk? The answers to these and similar questions lie in rethinking the framework within which we define, approach, and make impact investments.

One of the things we must do differently is to redefine what we mean by “skilled managerial talent.” Today the definition of “talent” is often biased toward English-speaking people found in urban centers. Yet social enterprises in regions like Bihar need talented managers who understand the local culture, people, and living conditions. Many of these people do not identify themselves as social entrepreneurs or frequent the high-profile forums and conversations on impact investing. Identifying and nurturing local talent will demand going much deeper into local areas and expending more effort than we do today.

In the next round of growth, the onus is on the champions of impact investing to find ways to reach out and enable local social entrepreneurs with the right resources at the right time. It is imperative that impact investors work in collaboration with all stakeholders— including philanthropic capital providers, governments, and regional and local enabling institutions—to identify creative solutions that can create positive impact in regions like Bihar and Guwahati. As much as there is a need to build the global community of impact investing, there is a need to also act local.