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  • 09.06.11

Impact Investing: Getting Financial Returns While Building A Better World

Imagine trillions of private sector dollars pouring into healthcare, affordable housing, education, agriculture, distributed utilities, and restructured social spending in emerging markets and here in the U.S. No, not in the form of charity; rather, in the form of “impact investing.”

Imagine trillions of private sector dollars pouring into healthcare, affordable housing, education, agriculture, distributed utilities, and restructured social spending in emerging markets and here in the U.S.  No, not in the form of charity; rather, in the form of “impact investing.” This is already beginning to happen, according to Antony Bugg-Levine, the newly named President and CEO of the Nonprofit Finance Fund (NFF).

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“Impact investing is any investment that intends to produce a social and environmental good while receiving a positive financial return,” Bugg-Levine says. Impact investment funds are springing from family offices, banks, institutional investors, financial services firms, and others, and Bugg-Levine says it’s just beginning. 

NFF was founded 30 years ago by Clara Miller, now President of the F.B. Heron Foundation. NFF has always been a pioneer in nonprofit, philanthropic, and social enterprise finance. Building on NFF’s legacy, Bugg-Levine sees the organization as the intermediary between impact investors, the aspirations of a new group of social entrepreneurs, and traditional nonprofits looking to embrace financial innovation. Continuing to advance NFF as a pioneer, Bugg-Levine says that NFF will consider what it can do “to mobilize and deploy resources more effectively to solve social problems.”

As an associate adjunct professor at Columbia University, Bugg-Levine observes that “the bifurcated mentality of nonprofits versus businesses/for-profits is anachronistic among today’s graduate students.”  Evidence is right here on Fast Company, where business innovation and technology is blended with social and environmental good. According to Bugg-Levine, new jobs and careers in a broad variety of sectors will “require people with financial and analytical acumen who also have empathy, patience, and an interest in social good.”

If we are indeed shifting to a world where business and social values are balanced and longer-term sustainability is the prize, then the future looks very promising.

[Image: Flickr user Images_of_Money]

About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions.

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