Most people follow a century-old paradigm of philanthropy, popularized by Andrew Carnegie back at the turn of the 20th Century. Simply put, maximize the return of investments, and give a portion of those earning to charity.
In Carnegie’s case, those investments provided him so much wealth, that despite giving away an equivalent of $5 billion in his two decades as philanthropist, enough of his wealth remained that 100 years later two foundations, the Carnegie Corporation of New York and Carnegie UK Trust are still up and running, with more than $1 billion in endowments.
Hundreds of other wealthy entrepreneurs have since followed this same model, with Bill Gates and Warren Buffet being the two biggest philanthropists this decade, promising to give away most of their combined $100+ billion in wealth.
The question I and others have starting asking is whether there is another way. Whether it is possible to combine the social good of philanthropy within the act of doing business? And specifically for investors, a question of whether it is possible to do good, while providing a reasonable return on investment.
To answer this question, we need to understand how investing and philanthropy are related.
Impact investing covers a broad swath of potential investments. It includes socially responsible investing (SRI), divesting your portfolio of tobacco, oil, and other such “harmful” stocks. At the other end of the landscape it includes microlending sites like Kiva.org, where you can lend an entrepreneur $25 or more with no interest, but with your the return of your original capital. And in-between, it includes profit-driven companies that aim to do some good in the world; mission-driven companies that aim to run via customer revenues, not philanthropy; and organizations which achieve the best of both worlds, doing good in the world while returning a market-rate return.
Since you are interested in Impact Investing, have you read these selections from Giving Compass related to impact giving and Impact Investing?
Looking for a way to get involved?
If you are looking for opportunities to learn and connect with others interested in the topic of Impact Investing, take a look at these events, galas, conferences and volunteering opportunities aggregated by Giving Compass.
Are you ready to give?
Impact Investing is an important topic. Other members found these Giving Funds, Charitable Organizations and Projects aggregated by Giving Compass to be relevant to individuals with a passion for Impact Investing.