What is Impact Investing?
Introducing Social Impact Investment
Impact Investments are investments that provide a blended return: both a financial return to the investor, and an intentional, measured, positive impact on people and/or the planet. Impact Architects’ UK-based international advisor David Carrington makes the following comment:
It is the investment of funds in a social purpose organisation with the deliberate intention that those funds will help to secure clear, positive, and measurable social outcomes – a public benefit – while also generating a financial return to the investor, enabling the funds to be recycled and used again to support further activities.
There are many people and organisations exploring social impact investing, and they come in all shapes and sizes, from very different starting points, and with very different expectations. The definition I used may sound straightforward, but it embraces a vast breadth (and depth) of investment activity. Social impact investing is often pictured as a long spectrum of activity, with individual philanthropy and charitable foundations at one end and commercial and institutional finance at the other. Those interested social impact investing are approaching the centre of the spectrum from both ends. Each of them combines a hunt for social change and for community or public benefit or “impact”, with a focus on how a financial return can also be generated over time.
Source: The Rise of Impact: Five Steps Towards An Inclusive And Sustainable Economy, UK National Advisory Board On Impact Investing, 2017 & Impact Management Project, 2017.