Giving Compass' Take:

• ImpactAlpha posts a podcast discussion about impact investing that serves as a good entry point for beginners and seasoned philanthropists alike. It draws a distinct line between "doing less harm" and "doing more good." The latter is what true impact strives to achieve.

• One big takeaway: The private sector is pouring money into impact investments at an enormous rate, dwarfing philanthropic capital. Can nonprofits keep up? What's holding them back?

• If you need another primer on the importance of impact investing and where it's going, be sure to check out this report from the Global Impact Investing Network.

There’s a lot of confusion around the term “impact investing.” A recent panel discussion in New York tried to clear it up.

The fintech company Liquidnet hosted the panel,“Demystifying Impact Investing,” at its New York offices, in collaboration with the Tristate Area Africa Funders Network. Brian Trelstad of Bridges Fund Management set the stage, explaining impact investing has grown at the crossroads of two distinct traditions  —  philanthropy and responsible investing .

Trelstad was joined on the panel by Georgia Levenson Keohane of the Pershing Square Foundation and Liz Luckett of TSEF (for The Social Entrepreneurs Fund). The panel was moderated by ImpactAlpha’s David Bank.

At the intersection of the two fields, philanthropy is experimenting with whether investments in businesses and social enterprises can be effective or self-sustaining ways to deliver certain social and environmental outcomes than traditional grants to nonprofits.

Responsible investing  —  looking at the underlying environmental, social, and governance characteristics of financial assets  —  is the other tradition. Asset owners increasingly are asking their advisors and banks for investment opportunities aligned to their values, in ways that “do less harm.”

Impact investing attempts to go beyond doing “less harm” to doing “more good,” by identifying opportunities to invest in new solutions to social and environmental challenges. If done well, impact investing can inject a design thinking / consumer feedback / market sensibility that typically is missing from most philanthropic efforts.

Listen to the podcast about demystifying impact investing at ImpactAlpha.