The idea of impact investing tends to divide people into two groups.
Some believe it is the best-of-both-worlds; a way to invest that bolsters their mission while generating competitive returns. Others fear that it is too-good-to-be-true; a distraction that cannot consistently produce returns that are comparable to traditional investing models.
In recent years, those who are bullish about impact investing seem to have outnumbered the bears. In 2016, the impact investing market in the U.S. was estimated at $8.72 trillion, or one-fifth of all investment under professional management. By comparison, the market was “just” $3.74 trillion in 2012.
In the meantime, families looking to initiate or expand impact investing strategies should reflect on how deeply their philanthropic mission permeates their investment philosophy.
They should ask how far they are willing to go to assemble an ecosystem of assets that support their impact goals.
Following are some key takeaways helpful to others charting their own course.
- Clarity of Intent: Foundations must ask “Why do this?” and “How best to proceed?”
- Reasonable Expectations: Benchmarks and other performance measures provide useful guidance, and equally important is having exposure to other impact investors.
Read the full article on impact investing by at National Center for Family Philanthropy
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