The State and Future of Impact Investing

Thursday, February 23, 2012

In a recent interview with Antony Bugg-Levine, CEO of Nonprofit Finance Fund, we discussed his new book about the impact investing sector, emerging trends and ideas in this space, challenges and opportunities moving forward, what the world would look like if the potential of impact investing were to be realized, and advice to traditional investors interested in becoming an impact investor.

Antony Bugg-Levine is the CEO of Nonprofit Finance Fund, a national nonprofit and financial intermediary dedicated to mobilizing and deploying capital effectively to build a just and vibrant society. In this role, Mr. Bugg-Levine oversees more than $225 million of capital under management and a national consulting practice, and works with a range of philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. He is the co-author of the newly released Impact Investing: Transforming How We Make Money While Making a Difference (Wiley, 2011).

Most recently a Managing Director at the Rockefeller Foundation, Mr. Bugg-Levine designed and led the Rockefeller Foundation’s Impact Investing initiative. He convened the 2007 meeting that coined the phrase “impact investing” and is the Board chair of the Global Impact Investing Network. A former consultant with McKinsey & Co., he also teaches at Columbia Business School. A native of South Africa, he served in the late 1990s as the acting communications director at the South African Human Rights Commission.

Rahim Kanani: Describe a little bit about the motivation and inspiration behind writing your new book, Impact Investing: Transforming How We Make Money While Making a Difference.

Antony Bugg-Levine: In the book we describe the “bifurcated world” that most people inhabit, in which they assume that the only way to solve social challenges is through government and charity and that the only purpose of business and investing is to make money. Impact investors reject that worldview. We recognize that for-profit investment can be both a morally legitimate and economically effective way to address social and environmental challenges.

I certainly come from that bifurcated world. I began my career working in politics and human rights and assuming that investors had sold out their principles to get rich. But working for the South African Human Rights Commission in the late 1990s, I saw how economic power and business dominance allowed people to perpetuate oppressive practices even when official policies had changed. On the other side, working at McKinsey and with TechnoServe, a business-focused nonprofit in East Africa, I came to see that business can be a creative force for empowerment and upliftment.

So with the support of the Rockefeller Foundation, starting in 2007 I began helping to bring together people around the world who share an excitement about the positive role that investment can play in addressing social and environmental challenges. As interest in this concept exploded, my co-author Jed Emerson and I thought it timely to write a book that could both serve as an introduction to this concept and also identify the systemic challenges we must overcome to enable impact investing to reach its potential.

Source: Forbes (link opens in a new window)

Base of the Pyramid, financial inclusion, impact investing