Impact Investing

Through Impact investing, the investor’s aim is to make a profit while having a positive environmental or social  impact on the world at the same time. The focus is usually on funding things like sustainable agriculture, clean technology development ,affordable healthcare or housing and improved education or employment opportunities. Microfinance projects are also popular in many emerging economies. Impact investing is often is done through debt, private equity or fixed-income securities.  There is usually no time frame, with investors supporting the project for as long as it takes.

Venture Philanthropy:

Venture philanthropy is slightly different to Impact Investing as it focuses purely on social impact while usually (but not always) making a profit. The primary goal is the improvement of systems and sectors as opposed to promoting and funding individual organizations and projects. Its emphasis is on capital building rather than funding operational expenses. Because of this, there is a strong emphasis on performance measurement. The focus is usually on medium-term projects with the engagement period being an average of five to seven years. Most venture philanthropy investments are done through a private equity firm or foundation.

 

Recommended Resources

 

THE KNOWLEDGE HUB IS A logo INITIATIVE. (C) 2017-2019.