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More than $1.5 Billion Flows Into Impact Investing
By Dan Sherman

“From combating childhood obesity to fighting climate change, from preparing American students for a 21st Century economy to doubling access to power in sub-Saharan Africa and ensuring all hard-working Americans have the opportunities to get ahead, our biggest national and global challenges require an all-hands-on-deck approach,” according to a White House report. One approach to target all these goals is impact investing.

To this end, a White House roundtable was set up to facilitate discussion among major investment groups and firms, such as the Ford Foundation, MacArthur Foundation, Cordes Foundation, Prudential Financial and Capricorn Investment Group. The result was more than 20 private sector investors committing over $1.5 Billion to be invested in assets which “intentionally generate sound financial return as well as measurable social or environmental impact.” Some of the targeted goals are: to deliver affordable healthcare and housing to low income communities, carbon footprint reductions and access to fresh produce for those in deserts.

First Affirmative is proud to have been involved in Impact Investing from the beginning and pleased to see that private foundations are embracing strategies that put them "all in for impact."

While this is a large step in the right direction, it is one of several for the administration. Among them is an investment fund set up by the Small Business Administration (SBA) to invest in private equity funds making impact investments. This fund already has invested $176 million in 17 different businesses. Other major steps include the creation of a loan guarantee system from USAID to spur lending in companies which offer environmentally friendly household technologies. The Corporation for National and Community Service (CNCS) is working together with the nonprofit B Lab to set up education for entrepreneurs who are seeking to adopt new, sustainable, business practices.

Socially responsible investing is gaining traction throughout the economy. Whether it is large private sector investments, public-private initiatives, or public programs assisting with impact investing, making money while doing good in the world is movement quickly gaining momentum—and unlikely to relinquish it any time soon.

 

At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?

 

Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.

 

Posted: August 12, 2014