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

Wednesday, March 11, 2015

Impact investing is seen as the most promising trend by the majority of global philanthropists, according to new figures.

The BNP Paribas Individual Philanthropy Index 2015 revealed that 52 per cent of global philanthropists nominated impact investment as the top way to contribute to society in the future.

The Individual Philanthropy Index by Forbes Insights measured the commitment of philanthropists in four regions – Europe, Asia, the Middle East and the United States and was derived from a survey of some 400 high net worth individuals in the four regions, each with investable assets valued at $5 million or more.

“While not strictly philanthropy, impact investing, which prioritises social and environmental returns before financial returns, is exciting to many people who care about philanthropy and social change,” the report said.

“It offers the potential of unleashing a huge base of capital to fund sustainable market solutions. By investing in companies that actively contribute to society, impact investing is contrasted with socially responsible investing, which aims to avoid certain companies, sectors or regions.”

After Impact Investing, collaboration and sharing was labelled the second most promising trend – understandable, the report asserted, considering the large number of organisations and the resulting fragmentation of the sector.

The third edition of the annual Index revealed that Philanthropy is growing worldwide, increasing by five points on average in the past year. Out of the four regions, Europe is now almost level with the USA, with a strong increase in current and projected giving.