Impact investing is not charity. In fact, it came about because of the failure of philanthropy to effectively address social problems.
The “investing” part of the concept is essential to how it makes impact, and investors may be attracted by the solutions companies offer and the financial return; this means organizations aren’t dependent year to year on the whims of donors, who may be well-intentioned but out-of-touch with on-the-ground problems. Impact investing is about long-term, sustainable solutions to improve the world.
In this Three Things video, Darden Professor Elena Loutskina discusses three important aspects of impact investing.