Giving Compass' Take:

• Rodney Foxworth explains how restorative investing can go beyond impact investing and close racial and wealth gaps. 

• What other systems can be undone by this method? 

• Read more about impact investing, including case studies. 

Impact investing — investments that generate both financial returns and social impact — is an increasingly popular approach to tackling social problems. In May, nearly 600 philanthropists, investors, foundation leaders, and others gathered at Mission Forward, the national conference of the Mission Investors Exchange — nearly twice as many as two years ago — to discuss how to accelerate impact investing.

Impact investing comes in many forms. But the predominant belief driving it is that the market principles of capitalism should be applied to social change. That view overlooks a key reality: the many ways in which market forces generate injustice and inequality in the first place.

Impact investing is often described as a way to transform healthcare, housing, and other areas in need of improvement, but it is impossible to dismantle the systems that created wealth inequality in our country while upholding the power structure of those same systems.

Fortunately, there are innovators across the country working to build new approaches.

Restorative investors work to subvert systemic injustices such as xenophobia, racism, gender inequality, and other insidious power dynamics that extract from and penalize communities of color, the poor, and the working class.

Read the full article about restorative investing by Rodney Foxworth at Mission Investors Exchange.