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

Thursday, January 19, 2017

The prospect is as exhilarating as it is daunting: As much as $30 trillion is expected to pass from baby boomers to their heirs in North America over the next three or four decades, according to a report from Accenture.

This intergenerational transfer of wealth is already under way. Increasingly, inheritors of my generation — millennials — and those that follow it will be intent on dissolving arbitrary boundaries between investing and philanthropy, profit and purpose, what we own and what we care about. The operative word is “impact” — making choices that are responsive to challenges such as resource scarcity, climate change and rising economic inequality.

This bodes well for inheritors becoming conscientious stewards of wealth — if they can overcome hurdles in aligning their values and investments in a way that generates sustainable financial returns. Achieving commercial or near-commercial rates of return is necessary because investors, increasingly, want to have their cake and eat it too when it comes to investing for purpose and for profit.

But where to start? When investors decide they want their money to do good things, they often don’t know where to begin as far as dissecting existing holdings and restructuring for impact investing.