What is Impact Investing?
Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Global Impact Investing Network (GIIN)
Impact investing is a form of investing that allows investors to generate financial returns while purposefully improving social and environmental conditions.
For many years, the for-profit and nonprofit worlds have tended to be kept apart, separated by the belief that the purpose of investing is to make profit and the only way to do social good is through aid. More recently investors and philanthropists have started to question if there is a way to do both at the same time; if there is a way to invest for both financial and social returns.
Today, impact investing as a movement is rapidly gaining steam. Finally understanding that aid alone is not going to solve the world’s social and environmental problems and that the private markets need to get involved in a bigger way, more and more individuals, institutions, and foundations like the IDP Foundation are looking to impact investing as a way to create a better tomorrow without foregoing profit.
Impact investments can be made in both emerging and developed markets and target a range of returns, from below market to market rate, depending on the investor’s strategic goals. They can take the form of loans, guarantees or equity investments.
Impact investing has unlocked new capital for social good. The IDP Foundation is excited to apply this very intentional and strategic way of investing to supplement our grantmaking and amplify our impact. Read about our Impact Investing Journey.