Make Your Dollars Count with Impact Investing

Throughout history, aspiring investors with a keen social conscience have faced a dilemma.

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Should they use their money for personal financial gain or to effect positive societal change? Combining those two supposedly competing practices in the same transactions seemed impossible.

What Is Impact Investing?

Impact investing is an investment strategy that generates financial gains alongside positive social and/or environmental effects. Rather than just making money for the sake of it, the aim is to use that capital for good. Done right, both the investor and the world end up better off.

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How does it work in practice? While impact investments can come in many shapes, sizes, and asset classes, the general idea is to invest in companies that are committed to serving society.

Times are changing. As evidenced by individuals like Mackenzie Scott -– the ex-wife of Jeff Bezos – who has donated over $8.5 billion to worthy causes since 2019, and Warren Buffett, who has given over $46 billion of his fortune to various causes throughout his life, investors are increasingly looking for new and flexible ways to make a difference with their money.

It’s more powerful than a typical philanthropic donation. Due to the nature of investing, those philanthropic dollars produce returns that can be reused time and time again, compounding their impact and interest every step of the way.

That’s good news given the extent and complexity of problems faced by societies everywhere. Alone, the capital available from private philanthropists and government support is unlikely to make a dent. Yet even a tiny reallocation of funds from global capital markets toward impact investing could have a sizable impact.

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