Last week, Jim Anderson of Bloomberg Philanthropies and Andrea Phillips of Goldman Sachs shared lessons from their investment in a social impact bond to reduce recidivism at Riker's Island.
It might be the new buzz word of investing, but leading investment advisors say impact investing is here to stay and what's more: it's a model that everyone should be participating in.
While we hoped this therapeutic program would have greater impact for youth, the social impact bond proved to be a highly useful tool.
As technology, human mobility, skills gap, resource scarcity and social issues transform the direction of global business, we cannot continue CSR as a "do good" quotient; we must now pursue and invest in impactful education as untapped possibilities.
According to a recent report by SFI, the total assets under management with a sustainable or responsible investment mandate is approximately 18 percent worldwide. This reflects a 929 percent increase since 1995. Investors are not only looking to eliminate negative impacts from their portfolio, they now want to make a positive impact with their dollars.
For many, Latin America is associated with a laundry list of negatives: drugs, corruption, gang violence and transnational crime. However, our new report Harnessing Social Impact Investing in Latin America, helps to dispel some of these myths.
A growing number of investors and philanthropists see that as a lost opportunity. What if you could put your investments to work in doing good, while still earning a decent financial return? That question is at the heart of a branch of socially responsible investing known as impact investing.
Both the triumphs and the growing pains of "impact investing" were on display in Oxford, England last week. Impact investing goes beyond the passive tactic of limiting investments to, say, companies that are green or that don't produce guns.
We should remind ourselves that using wealth simply to create additional wealth, and hoping that will bring peace, happiness and immortality, is nothing but an illusion. Once the needs of family are met, we should use the rest for social good.
If we want to effect social change at scale, investors need to enlist the capital markets by injecting intention and purpose into every financial decision.
Achieving affordable access to safe water and sanitation for all has been one of humanity's most intractable problems. This is despite the fact that billions of us take these services for granted. We have known how to deliver affordable, safe water for more than 100 years yet for more than 2.5 billion people these services are absent.
Philanthropy has a small amount of financial capital, so leveraging it with all of the other resources available to us is vital. Ambassador Joseph gave us more inspiration and the framework to advance the role of philanthropy in our community.
The developed world functions in no small part at the will of the free markets' Invisible Hand. But sadly our free markets and our financial systems have also left a toll on millions and have yet to touch billions.
Recently I was having a conversation with a private banker who manages wealth portfolios, and she lamented the difficulty of getting her HNW clients interested in Impact Investing. She was recounting to me the challenges she was having in getting her HNW clients interested in Impact Investing
"This is a Man's World" may have been the long-running theme song of our capital markets for decades, but when it comes to the investment field, women are singing a different tune. And companies may want to learn the lyrics.
Thanks to our imperfect, yet glorious, democracy we have the opportunity to make an impact investment in reversing this trend. Even more, this deal won't require you to decide which GIIRS metrics to use or haggle over pre-money valuations. All you need to do is believe we owe it to our future generations - and our pocketbooks - to reduce the corrosive influence of money in politics.