June 30

Impact Investing Grows, but There’s Still a Long Road to Financial Inclusion

By Nithin Coca

The evidence is clear: Despite rapid economic growth, the United States has become more unequal over the past few decades. The income of the highest-earning 20 percent of households has steadily grown, while the wealth gap between the richest and poorest families has doubled since 1989. This is even more true when it comes to racial inequality. The income gap between Black and white households has held steady since 1970, with average Black household income stuck at just 56 percent of white household income.

This is problematic, and pervasive. Low-income communities — and communities of color, in particular — see little investment, even in basic necessities such as healthcare, education and housing. As government spending drops, this has led to catastrophes such as Flint, Michigan’s ongoing water crisis. Private capital has not replaced government spending in many communities — one reason is that many financial institutions and investors see no reason to invest in places where they believe there’s little opportunity to get a return on their investment.

Photo courtesy of Free-Photos.

Source: Sustainable Brands (link opens in a new window)

Impact Assessment, Investing
impact investing