What is impact investing?

This is a question we are seeing asked with increasing frequency lately. More people than ever are hearing about this exciting new financial trend and wanting to know what the big deal is.

Impact investing is simply using your money to affect change that you care about and earning a financial return as well.

Maybe it sounds too good to be true, but estimates from the Global Impact Investing Network put the size of the impact investing market at $114 billion in 2016, and that number is only growing. Many large, established financial institutions are beginning to see the light. Some investors have even made the commitment to become “100% impact investors.”

“ImpInv” was born out of the realization that there are some problems that philanthropy cannot solve. Common areas of focus include environmental issues such as the need for green energy and combating climate change; social issues such as access to affordable housing and paying workers a living wage; and corporate governance issues such as fostering diversity and inclusion in the business world.

 

 

The best part is that it’s for everyone. If there is a problem in the world that you’re passionate about fixing, chances are there are also innovative entrepreneurs seeking funding to tackle that problem. And with the advent of crowdfunding, you don’t even need thousands of dollars to get started – you can invest in American Homeowner Preservation for as little as $100.

Here are just a few reasons to get into impact investing now:

• Financial returns are stronger than ever – studies have shown that it’s not unreasonable to expect a market-rate return alongside the social impact of your investment.
• ImpInv is taking off – the value of assets held by impact investing funds grow every year, and 2017 saw the two largest impact investing conferences in the world by attendance. You can be a part of this growing community.
• The world needs impact investing – from climate change to global poverty, from wealth inequality to hunger, there are a myriad of problems that socially conscious investors and entrepreneurs can work together to solve.

Wondering how to get started? Try our article on impact investing in 2018. There’s no better time than now to make an impact with your investments.