In this article for Minnesota Council on Foundation’s Giving Form I describe the challenges I see facing the field of impact investing.
After decades crying in the wilderness, I should be happy now that investing for good has hit the mainstream. Right? Mainly, I’m optimistic about the flood of philanthropically minded investors shifting their resources in pursuit of their mission, beyond the 5 percent customary for most foundations.
Perhaps it’s akin to sending your children off to college to live their independent, adult lives. I’m hopeful, but I worry.
As it moves into the mainstream, impact investing faces four threats: impact washing, insufficient diversity, lack of transparency, and risk aversion
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!