June 28, 2010| 0

Practical Resources for Social Impact Investing

So, how can our investment/savings decisions be a part of how we live out God’s vision for His creation?

Allocating even just one percent of our investment/savings “portfolios” can have a huge impact in the world, and expand the reach of business investment for positive impact on communities and human flourishing. (For an in-depth consideration of social impact portfolio allocations, visit blendedvalue.org)

Microfinance: There are numerous levels and opportunities for our investments to make a difference through microfinance. Whether it’s $25 in Kiva — which does not pay a financial return, but it does return your capital in full; $250 in Microplace — which allows you to set your own “interest rate” of return, up to 3 percent; $1,000 in Oikocredit — an ecumenical, faith-based microfinance investment organization; or $50,000 in Global Partnerships — which has leveraged $25 million in microfinance debt investment from social investors, you can have an impact.

Socially Responsible Investing (SRI): The past 20 years has seen a significant growth in SRI mutual funds, and the opportunity for anyone to align their investments with making a difference toward greater human flourishing in the world. Whether it’s the Social Investment Forum or Social Funds, there is an abundance of information available for any of us to get started, and a multitude of mutual funds from which to choose (both religious and secular).

The past 10 years has seen significant growth in the reporting/rating of social performance metrics for individual companies, which can inform both our investment and our consumer buying decision-making.

Whether it’s through the Global Reporting Initiative (GRI); the newly created Global Impact Investing Rating System (GIIRS); or Free2Work.org ratings, where consumers can easily learn more about various labor standards and corporate practices in making their consumption decisions, tools such as these can provide us with valuable information regarding a company’s impact in the world — whether for good or not good — and thereby, where to direct our investment and buying decisions.

Although not a direct investment opportunity, one other resource of note is the Interfaith Center on Corporate Responsibility, which since 1971 has “merged social and environmental values with investment decisions, believing as long-term investors one must achieve more than an acceptable financial return.”

Social Business, Social Venture, et al: Many social ventures continue to be started with “missions” that address issues of global poverty as part of their business model. Whether it’s through entrepreneurs who start businesses or social investors/venture capitalists, such as U2’s Bono, who can direct larger amounts of capital for investment, social ventures offer unique opportunities for business to achieve a significant impact in changing the world for good. Entrepreneurs and venture capitalists are often the ones most willing and/or able to take additional risk, and combining that risk-taking with a social mission can be a powerful combination for fighting global poverty through business.

These are just some examples, and merely scratch the surface of ways in which we can take a more proactive role in addressing issues of global poverty through business.

Certainly there will continue to be a need for effective and targeted aid in the near-to-medium term future. However, to ultimately achieve venture-capitalist Bono’s newfound vision to “Make Aid History” we need to “think different” and consider the ways in which our savings/investment can be put to work in directing business to “make a difference” for human flourishing. This includes saving/investing for social impact in our own country, as there are countless communities and neighborhoods which are thirsty for socially motivated, profit-driven investment, rather than simply another charitable handout.

Can business change global poverty? Can our investment choices make a difference? Absolutely. So what are we waiting for?

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About Jeff Keenan

I personally began investing (thru a socially-responsible mutual fund) in Africa in 1994 - specifically as a way to have more significant and lasting social impact through the economic sustainability of business.  Since that time, many more investment options and opportunities have become available, and I have been able to broaden the “portfolio” of social impact investments to be both domestic and international.  Socially-motivated investing has subsequently become a profoundly personal part of my own faith journey, and a way to “balance my savings/investment portfolio” with God’s vision for a reconciled world. Social impact investing is one important way to help catalyze and develop sustainable economic livelihoods throughout God’s world, and break the too-often demeaning cycle of charitable dependence.

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