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?
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.
What if our investment/savings decisions incorporated a desire to proactively address issues of global poverty as part of a business being considered successful?
Microfinance has certainly opened the door to awareness and lively conversation regarding the intersection between “doing well and doing good.” Microfinance serves as a powerful “entry point” for individuals to make the connection between business and changing the world for good. And it can be an effective means to combat global poverty.
Yet it is only one of numerous frameworks within which business is now changing the world for good. And in fact, none other than the most well-known microfinance pioneer, Muhammad Yunus, continues to make the case for thinking much more broadly about the significant impact which the business community can have toward changing global poverty:
Charity is not the way to help people in need; it is not a healthy basis for a relationship between people. If you want to solve poverty, you have to put people in a position to build their own life. … (Conventionally/historically-speaking) if you wanted to do something good for the world, you didn’t think of starting a company; after all, you weren’t interested in money. (However), I believe there is no better way to combine your desire for a better world with effectiveness than through a company. (Ode magazine, July/Aug 2005)
Social ventures, social enterprise, social business … triple bottom line, blended value, socially responsible investing … corporate social responsibility, sustainability, stewardship …
The above are just some of the new and/or mainstream “buzzwords” associated with businesses and investors now willing to grapple with the paradox that “mission versus margin is not an either-or,” as described by social entrepreneur Julius Walls, Jr. (Greyston Bakery) in his recent book, Mission, Inc.: A practitioner’s guide to social enterprise.
Whether we have $25 or $25 million to invest, what if a portion of our investment decision making was allocated to consider the impact which our investment could have on preventing issues of poverty — in addition to achieving a financial return?
What if — instead of “giving back” only after we maximize our investments for financial returns — we aligned our investments/savings to achieve both (reasonable) financial profit as well as human flourishing, and thereby, created a world with less need to “give back” in the first place?
Can business change global poverty? And can our investment/savings decisions be a part of how we live out God’s vision for His creation?
The third and final blog post in this series will offer ways that anyone can invest/save for both financial return and human flourishing — whether $25 or $25 million — and proactively address the issues of global poverty through business and investment.
About Jeff Keenan
Jeff Keenan is an author, poverty alleviation activist, and global supply chain leader. He personally began investing (through a socially-responsible mutual fund) in Africa in 1994 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 he has been able to broaden his “portfolio” of social impact investments to be both domestic and international. Socially-motivated investing has subsequently become a profoundly personal part of his faith journey, and a way to “balance his 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.
Is the fight against global poverty making a much-needed paradigm shift from being aid-centric to trade-centric (i.e., business-centric)?
None other than the "front man" for global poverty - Bono, of U2 fame - seems to now be saying as much, as witnessed by his recent Op-Ed in the New York Times.
After completing his recent "listening" tour of Africa, Bono expressed his excitement about things as un-aid like as entrepreneurship, business partnerships, investment (the business kind) - and even seed capital. (Maybe his relatively unknown pastime as a venture capitalist in Elevation Partners is starting to reap some unintended dividends for the fight on global poverty!)
But as much as I admire Bono's efforts on behalf of the world's poorest people, it was not his excitement about business that actually captured my attention. Rather, it was the passion of the business people he met in Africa, many of whom were challenging Bono's (and by proxy, our own) aid-centric thinking about the problem.
And not just politely challenging it, but provocatively challenging it.
One of those business people is named Mo Ibrahim, a Sudanese-born, British-based telecom industry billionaire. In his conversation with Bono, Ibrahim in effect "lays down the gauntlet" to Western capitalism - almost daring Western business people and investors to enter the African marketplace. Bono quotes Ibrahim as saying, "Guys, you Americans are lazy investors. There's so much growth here, but you want to float in the shallow water of the Dow Jones or Nasdaq."
To be fair, some businesses and investors are already "floating" in the waters of Africa - literally and figuratively.
EarthWise Ventures is investing to re-establish economically viable ferry transportation on Lake Victoria. Starbucks is up to almost $15 million invested in microcredit loans to farmers, in partnership with social investment funds like Calvert Social Investment and Root Capital. The Initiative for Global Development (chaired by the CEO of REI) is matching CEO mentorships between developing and developed country business leaders.
These are just a handful of examples where businesspeople are choosing to integrate impact beyond the bottom line.
Can business change global poverty? Is venture capitalist Bono's excitement justified? Is business ready to responsibly participate in a transition from aid-centric to trade-centric?
The second blog post in this series will look at various approaches to how we all can begin to "think different" about our investing - whether it's $25 or $25 million - and how that decision making can help to change global poverty.
Jeff Keenan is an author, poverty alleviation activist, and global supply chain leader.
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