In light of everything that has been going on in our country lately, many Americans have started to look into social change and social impact. How can they create social change in their communities? How can we be the change we want to see? How can my actions have a social impact?
Furthermore, during this pandemic, many Americans have also started to look deeper into their finances. Should we start a high yield savings account? Should we start investing in companies or stocks? What if I told you that you could combine these two sentiments? Yes, you could invest in something that will have a social impact while giving you a financial return. Impacting investing aims to generate specific beneficial social or environmental effects in addition to financial gains. This type of investing is sometimes called social impact investing, double bottom line investing, and social change investing. These types of investments use your money to invoke social change while receiving a financial return. It is truly a win-win.
Now impact investing isn’t just for big companies, but for non-profit foundations and entrepreneurs. There are several types of impact investing. You can invest your money in developed or emerging markets in a variety of industries, such as education and healthcare. Wouldn’t it be amazing to know that you’re helping an overloaded healthcare system or underfunded schools? Impact investing gives investors a chance to give back to communities that have been neglected or overlooked.
Now, I’m sure you may want to know, how can we trust our money is going to the right company? That’s when we check out the company’s commitment to corporate social responsibility (CSR), their sense of duty to create a social impact in society as a whole. For example, let’s say you’re really into renewable energy and want to invest. Look into companies that are all about renewable energy and invest your dollars with them. Another good way to get started is to seek out a “b-corp” bank such as Sunrise Banks or b-corp companies such as Peace Coffee. They are dedicated to producing public benefits (and we’re proud to say that our company, Cogent Consulting just became a PBC last year!). With impact investing, you will be helping to invoke a social impact while receiving a financial win. Like we said before, it’s truly a win-win.
When COVID-19 and the ensuing economic disruption hit, I worried that impact investing would recede as investors sought comfort in old-style investing and social entrepreneurs kept their day jobs. Luckily, my worries were for naught: more investors are interested in doing good and doing well. More philanthropists are looking for innovative ways to address the multiple crises we face: health, economic, racial, civic, climate, and rural. Social entrepreneurs are launching and growing their ideas to address the world's problems. These leaders give me hope!