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

Thursday, August 21, 2014

If the world is to solve its huge environmental and social problems, it’s going to take more than government spending and private philanthropy. These sources can bring in billions of dollars, but what’s really needed is trillions—the sort of money only business and the markets can provide.

The idea of impact investing–a term originally coined by the Rockefeller Foundation in 2007–is to get at this untapped money. It’s a way of deploying capital both for profit and social purpose, as Co.Exist has covered a few times here, here, and here.

“Put simply, impact investments are intended to deliver both financial returns and social and environmental benefits,” explains a new book by Judith Rodin and Margot Brandenburg. “If we are to have any hope of solving the increasingly dynamic, complex, and messy challenges of our time, we need more investors to take this dual approach to investing. We are not suggesting that impact investing replace charitable donations, government spending, or philanthropic grants. Rather, we need more and different types of funds to complement philanthropy and strategically leverage larger and more commercial sources of funding.”