Giving Compass' Take:
- Steve Dubb shares Anand Jahi's vision and requirements for social justice investing for philanthropists who want to make a real impact with their investments.
- Are your investments meeting these requirements? How can you shift your investment strategy to meet these criteria?
- Learn why impact investing is even more important in uncertain times.
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In a report published last year for Just Futures, an investment advisory firm that seeks to encourage “values-based investing,” Anand Jahi indicates that the amount of money invested on Wall Street totals $71.4 trillion (4)—nearly three times the value of the annual gross domestic product of the United States.
By comparison, the $75 million (33) that Jahi indicates is invested in social justice is roughly one millionth as much. Scale, in short, is a long way off. But the potential for scale is there. One sign of this is the rapid growth of what is variably called “socially responsible investment” or “impact investment.” In other words, hunger for investments that generate social benefit is widespread, even if many of the investment vehicles for getting there are flawed. In his report, Jahi aims to sets forth a clear definition of what a social justice investment ecosystem could look like and challenges nonprofits and philanthropy to shift their investment strategy.
Creating a Social Justice Investment Chain
Though Jahi’s paper is written for a specific investment advisory firm, the principles behind it have broader application. Jahi’s paper builds on the concept of “social movement investing” as developed in a paper published by the Center for Economic Democracy a year ago, but he is less theoretical and more empirical in his focus.
If US SIF’s criteria for impact are very loose, Jahi’s are very strict. Jahi writes that a social impact fund must (32):
- Be deeply aligned with and led by social justice movements
- Invest in and build power with marginalized communities
- Support community-controlled enterprise
- Offer non-extractive terms (that is, below-market interest rates)
- Be accessible to ordinary people (that is, accept investments from retail investors)
Read the full article about social justice investment by Steve Dubb at Nonprofit Quarterly.