Impact Investing: $1.5 Billion in Commitments and a New Resource for Policymakers
Wednesday, June 25, 2014
It’s a great week for impact investing. At the White House roundtable on impact investing today, corporations, banks, foundations, and individuals including Prudential, Capricorn Investment Group and the Omidiyar Network committed to invest more than $1.5 billion in new capital into companies and funds that strive to generate positive financial and social returns. US government agencies, including the Small Business Administration, USAID and Treasury, also announced programs to support impact investments and social enterprises.
These commitments were complemented by the release of a new report from the U.S. National Advisory Board to the Social Impact Investment Task Force–Private Capital, Public Good: How Smart Federal Policy Can Galvanize Impact Investing–and Why It’s Urgent. The report provides a framework for how federal policies can support impact investing. The presence of both investors and policymakers committing to support businesses that are using market forces to create social change is a great signal for the space.
The Private Sector Steps Up
As we look at a world with urgent needs, many realize that there is an incredible opportunity to more effectively bring companies and entrepreneurs into the business of solving social problems by both tapping the entrepreneurial spirit, and by leveraging the power of the private sector. Government, philanthropy, and nonprofits cannot solve many of our world’s greatest challenges alone. Indeed, many of these challenges–in education, healthcare, and access to opportunity, for example–have become chronic and in real need of new, more scalable solutions.
A new day has dawned. Impact investing offers a unique opportunity to “invite business in” – not limiting their role to that of their foundations or social responsibility programs, but rather enabling and encouraging them to use their core areas of expertise, or their established products and services in these efforts.