NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, May 14, 2014

(WOMENSENEWS)–No one wants to throw good money after bad.

So here’s a recommendation for all you women out there who are busily donating more frequently than men to charitable causes: Consider investing in social-change undertakings that are run on a for-profit basis and give you a return on investment.

If you do, you will be joining a major money trend by some big investors to put “risk capital”–or money with no reliable outcome but plenty of upside–into endeavors that were once left up to the philanthropy or public sectors alone.

The Center for High Impact Philanthropy at the University of Pennsylvania, for instance, lists causes including early childhood education, maternal and child health, poverty, economic disparities, hunger and other issues that can be of special concern to women as possibilities for donors. The center announced earlier this month a $125,000 donation to Breakthrough, a New York-based international human rights group aimed at ending domestic violence against women.

Cheyne Capital recently announced it will launch a $300 million social impact fund. The Rockefeller Foundation also has a social impact fund and Goldman Sachs launched a $250 million social impact fund last November. All are focusing on addressing social challenges while providing a financial return.

To this same end, The White House recently hosted a conference sponsored by the Office of Science and Technology Policy in conjunction with Nexus for the young male and female heirs to the greatest American fortunes–Rockefellers, Pritzkers and others–to encourage responsible and effective philanthropy specifically targeting issues of concern to women, such as human trafficking.

Social investment funds are able to raise risk capital that is often coupled with human resources and business expertise. Impact investing takes the concept of “socially responsible” investing one step further. Rather than just vetting companies to ensure that investments are not exploiting workers or the environment, impact investments are in for-profit businesses addressing specific social issues and working toward the greater good.