Kevin Starr’s critique of impact investing resonates with anyone who has worked where results cannot clearly be linked to invested capital: Intentionality without additionality is mostly theater. Market-rate capital rarely flows toward the places where risk is real, margins are thin, and the human stakes are highest. The assumption that deep social change can be achieved without trade-offs in returns, liquidity, or risk, has often hollowed out the middle of the social impact field, leaving entrepreneurs in low-income and high-complexity contexts stranded, between philanthropists who see them as too commercial and investors who see them as too risky. No one is well served by euphemisms, especially not for development impact investing and philanthropy. Starr is right that calling concessionary capital what it is—philanthropy—can restore a kind of moral clarity and operational discipline.

However, the argument makes some assumptions about who benefits from impact and where returns actually accrue, classifying the activity as philanthropic if the investor cannot capture a market-rate financial return. However, in the social impact field, our work often produces public cost savings that must be understood in a different framework. Interventions might be economically productive without being privately capturable, where the returns do exist, but land elsewhere.

That distinction is visible, concrete, and measurable in places like Austin, Texas, where I serve as the CEO of The SAFE Alliance (the largest organization in the South providing services for survivors of domestic and sexual violence, sex trafficking, and child abuse). Our services conservatively save public systems $120 million per year in avoided costs. These savings are not speculative when considering development impact investing and philanthropy. A substantial body of research shows that stabilizing high-need individuals typically reduces public expenditures by approximately $20,000 per person per year, once health care, shelter, and justice-system costs are accounted for; SAFE’s approximately 6,000 people served annually yields striking public savings.

Despite the scale of these savings, however, they accrue primarily to systems that do not fund SAFE’s work at levels that reflect the value they receive: emergency departments that see fewer crisis visits, law enforcement and courts that handle fewer incidents, child-welfare systems that avoid foster care placements, and public payors that shoulder less long-term medical and behavioral health costs. The return is real, but it is structurally displaced, captured downstream by public institutions rather than upstream by the organization or capital that generated it.

Read the full article about development impact investing and philanthropy by Pierre R. Berastaín at Stanford Social Innovation Review.