Monday, January 12, 2015
All Investing is Impact Investing
In the United States, nearly $1 trillion is committed to philanthropy — sitting in foundations, donor-advised funds and elsewhere. Donors have transferred ownership of these funds to separate entities and received their tax deductions. Yet only a small percentage of those funds is expended on charitable donations for the public good. The great majority of those resources are invested for a financial return without regard to the impact on society.
Philanthropically committed funds are traditionally divided into two silos: grants for social impact and investments for financial growth.
Grants to nonprofits are designed to maximize social impact by providing critical support to worthy causes. They can be viewed as a "social investment" with a 100 percent negative financial return for the donor. Once given, the funds never come back....