Giving Compass' Take:

• Patrick Briaud, writing for Rockefeller Philanthropy Advisors, lists the ways that philanthropy can play a unique role in the impact investing world. 

• What are the barriers for philanthropists that do not exist for impact investors to achieve social good?

• Read more about the intersection of impact investing and philanthropy.


Impact investing has the attention of institutional investors – driven largely by client demand.

Across the financial industry, the number of SRI (socially responsible investing) mutual funds and ETFs has grown rapidly. MSCI and Morningstar – leading providers of independent investment research – have also released ESG indices and ratings to inform investment decisions.

On the whole, this is a good thing.

It means more attention, more resources, and more integration into investment management practices, which drive $300T in global capital markets. If only 1% of that money moves towards impact, the U.N. Sustainable Development Goals could be fully funded (citation).

As with any opportunity, there are risks. One key risk is the effect of traditional investment priorities overshadowing those of traditional impact dollars, a.k.a. philanthropy.

Impact. Investing. Half of the name is what professional philanthropy has been doing for over a century and impact investing will do well to take note. (To be clear, philanthropy also has much to learn from business and traditional investing: market-based approaches, operational efficiencies, data & research, innovation, etc.)

There are four ways philanthropy plays a critical, unique role in impact investing:

  • As investment dollars.
  • As infrastructure builders.
  • As impact translators.
  • As thoughtful educators.

 

Philanthropy continues building critical impact investing infrastructure: associations, benchmarks, market-mechanisms, regulation, and research.

Read the full article about philanthropy's role in impact investing by Patrick Briaud on Rockefeller Philanthropy Advisors.