Giving Compass' Take:

• The Alpbach Forum is a conference based around the fundamentals of impact investing. Cliff Prior, writing for ImpactAlpha, describes his critical takeaways about the investment practice. 

• What are some of the challenges that come with impact investing? How can investors be sure that they are "adding more value than they extract?" 

• Read the Giving Compass Impact Investing Magazine for donors for more information. 

Until recently, pioneer specialist investors led the way in impact investing. Now, an increasing number of impact funds are being created by mainstream asset managers.

In August, 42 leaders in the field convened at the Alpbach Forum to consider the fundamentals of impact investment. The leaders were invited to reflect the diversity of experience across the impact ecosystem and across the globe, and the depth of their insights was outstanding.

The dramatic change and growth in impact investing could be a massive win, opening up much greater scale of finance for good, and over time creating the opportunities for the public to place their savings where their values live.

So here in rough form are the fundamentals which I took away from this work:

  • Make explicit where you act in the impact investment field, using the Impact Management Project convention;
  • Be clear where, when, how and with whom you are useful – or not – as an impact investor;
  • Commit to respectful relationships across the system;
  • Start with the social issue and end-user experience, rather than with the finance, using common standards such as the UN’s Sustainable Development Goals framework;
  • Engage with end-users in the impact investment process;
  • Ensure that your investments add more value to end users than they extract;
  • Balance risk and returns fairly among all stakeholders;
  • Consider risk, return and impact in each of your investments;
  • Measure and disclose unintended as well as intended consequences; and
  • Report publicly and transparently against common impact standards.

Read the full article about impact investing by Cliff Prior at ImpactAlpha