Giving Compass' Take:

• Authors describe how impact investing has emerged as a practice that can shift systems and catalyze social change. 

• How is your philanthropy or investments addressing issues at the systems level? 

• Learn more about impact investing, here. 


In the decade since Rockefeller Philanthropy Advisors published a pair of guides to the nascent practice of impact investing, the field has evolved dramatically. New and sometimes unlikely players are developing new themes and impact lenses, from place-based investing to the creative economy, and gender lens investing to racial justice. These motivations –  the ‘Why’ of impact investing – drive their strategy and implementation.

Given the monumental challenges of systemic racism, climate change, and other pressing issues, tinkering around the edges is no longer enough. A growing number of impact investors are seeking to affect real systems change. The last few months have transformed the ivory tower idea of systems change to one that is both tangible and visceral. Unfortunately, Wall Street does not seem to have noticed the major social and environmental movements confronting Main Street. How can impact investing play a role in connecting the two?

Impact investing has emerged out of social and environmental movements as well as the intention of investors to use investment tools to shift systems and drive positive change. One important example is divestment from South Africa in the 1980s in order to change the apartheid system. More recently, we have seen the expansion of specific investment lenses to engage systemic issues.

Many people believe that the complex challenges and “wicked problems” facing the world today can only be solved through integrated approaches to policy, philanthropy, and investment. Systems change is about addressing the root causes of social and environmental problems, which are often complex and embedded in networks of cause and effect. It is an intentional process designed to fundamentally alter the components and structures that cause the system to behave in a certain way.

Those who want to shift or disrupt at a systems-level seek to find leverage points that can have a big impact, which can link to specific issues they care about. Leverage points range from shallow parameters that are more mechanistic to system design features, such as social structures, rules, and policies, and finally to the deepest leverage points—people’s mental models, beliefs, values, and assumptions—which, in turn, shape structures and patterns in society.

Read the full article about impact investing by Patrick Briaud And Steven Godeke at Rockefeller Philanthropy Advisors.