The Challenge
It’s going to take far more money than all the philanthropies and governments have at their disposal to make a significant impact on
Impact investing could expand to a $500 billion industry in the next decade.
improving the lives of all the poor and vulnerable people in the world. Impact investing— which helps address social and/or environmental problems while also turning a profit—could unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges.
However, the small but rapidly growing impact investing industry stands at a pivotal moment in its development. There is increasing interest and enormous potential—some say it could expand into a $500 billion industry in the next decade. But the basic systems and networks necessary to identify, vet, and monitor investments efficiently are not in place. Until they are, potential impact investors remain on the sidelines and the industry cannot take off.
Steve McCurry
Our Strategy
The Foundation’s Harnessing the Power of Impact Investing initiative aims to overcome the major obstacle to the growth of the impact investing industry. Since 2007 we have asked hundreds of current and potential impact investors around the world what it would take for them to be able to address social and environmental challenges more efficiently with for-profit impact investments. The answers to this question form the basis of our four-pronged strategy:
- Catalyzing platforms for collective action that enable leading impact investors and intermediaries to coordinate efforts, such as disseminating standards, sharing information, and collaborating on deals
- Supporting the development of scaled intermediation vehicles that help absorb impact investments at a scale necessary to attract the institutional investors who control the lion’s share of global capital
- Building industry-wide infrastructure that enables broader and more effective participation in the impact investing industry
- Supporting research and advocacy efforts that promote an analytical understanding of the impact investing industry and take necessary steps to facilitate its maturation
Key Outcomes
This initiative seeks to help accelerate the development of an industry that can efficiently place for-profit impact investments to improve a wide range of social and/or environmental conditions. We work on four goals to achieve measurable outcomes:
- Spark collective action platforms for impact investing industry leaders to coordinate investment and promote the infrastructure, activities, education, research and collaboration needed for the growing industry to tackle a wider range of social challenges more efficiently.
- Develop industry infrastructure that can sustainably support impact investors to tackle a wider range of social challenges with for-profit investment and improve the performance of the industry.
- Support scaling of organizations and structures (such as private equity funds and investment clubs) to aggregate institutional-scale impact investments and place them efficiently with investees who use this capital in a range of areas (including improving agricultural productivity and enhancing access to healthcare and decent housing) and geographies.
- Contribute to fundamental research and advocacy of impact investing so that its promise and challenges are widely understood and policy reforms encourage accelerated expansion of impact investing by existing and new institutional investors.
Full Summary: Impact Investing (PDF)
