Giving Compass' Take:

• This report explains how families and family enterprises can take advantage of impact investing practices by offering a simple framework to guide them.

• How are impact investments affecting family philanthropy dynamics? What are the main benefits for families?

• Check out the Giving Compass Impact Investing Magazine. 

What do people really mean when they talk about “impact investing?” Why do people make impact investments, and how do they do it? What counts, and what doesn’t?

This primer provides family enterprises* with clear explanations of the “why,” “how,” and “what” of impact investing. The following pages will illuminate the diversity of the impact investing marketplace as it exists today, and provide families with a basic understanding of how they can start making more impact investments more effectively.

There are several distinct forces motivating families to make impact investments. Each of these motivating forces may inspire very different kinds of impact investments. A family’s impact investment strategy tends to be a function of the family’s motivation(s) and the entities out of which they are making investments. Here are three major motivations that we see driving families to make impact investments:

  1. Motivation 1: Values Alignment
  2. Motivation 2: Social and Environmental Impact Drive Long-term Outperformance
  3. Motivation 3: Using Business to Address Specific Social and Environmental Challenges 

Whether they are just dipping their toes in the water, or ready to dive in, families can make more impact investments more effectively. We hope that this primer may help families begin this process, by providing simple frameworks through which families can understand their motivations and identify sensible and, ideally, immediate ways to get started or to do more.