ImpactAssets says, “Millennials are demanding more integration of their money and values by seeking personal fulfillment in their careers, applying a global consciousness to their purchases and investing in sustainable, impactful business models.” Their recent report [PDF] looks at the reasons why, implications and ways financial advisers can best respond.
Here is one way–Gloria Nelund tells Forbes why she launched a fund to make impact investing available to “Main Street” retail investors:
[C]ompanies who strive to balance the needs of all of their stakeholders and run their companies responsibly, in the long run will outperform those that don’t. It all comes down to people – people want to be productive, self-sufficient and have meaning and purpose in their work and will work hard to achieve goals given the opportunity, and people want to be treated fairly (as customers, as employees, as vendors and as shareholders). So, if you can tie all of that together by investing in “responsible” companies you can create jobs, pay fair and increasing wages, raise the tax base for the community which leads to more/better infrastructure (water, energy, roads, transportation, etc.), more/better education and healthcare systems.
…There is a point when commerce needs to replace aid and I think we often miss that tipping point. If we don’t eventually set up the systems for people to begin to productively provide for themselves and their families, we create a dependency on aid that leads to unintended consequences and rarely results in long-term sustainable impact.
The Sundance Family Foundation’s Nancy Jacobs talks about the process of moving into mission investing with their endowment:
We decided early on that it didn’t make sense to close our eyes and ears to how our money was being invested,” Jacobs says. Sundance started by allocating 10 percent of its portfolio to the MRI approach and has now reached 80 percent while maintaining above-market returns. “Fear of the unknown is what keeps foundations in traditional investments,” she says. “Billions of dollars are on the sidelines, uninvested in community development funds domestically and globally, that could be changing the face of giving exponentially.
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