Amplifying Your Philanthropy Through Impact Investing

At Invest for Better we seek to curate and share with our community the best, most accessible resources about impact investing that have been created by our colleagues in the field. But sometimes there is a gap and we step in to fill it.

Many of the women in the Invest for Better community are highly experienced philanthropic leaders, but new to using their investments as a force for social change. They have often deployed smart, focused philanthropic giving to support innovation and experimentation in their focus areas, to fill a gap in services that should be covered by public money, or to bring together stakeholders to learn and collaborate. But they may be frustrated by the limited ability of philanthropy to scale proven solutions. Or perhaps discouraged by the absence of sustainable funding for an essential program. They are intrigued by the idea of turning to the capital markets and their own investment capital to address these challenges, but don’t quite know how.

It is for these women that we created our workbook, Amplifying your Philanthropy through Impact Investing, with generous support from Fidelity Charitable. Aimed at helping the philanthropist who is a newbie impact investor develop plans for both learning and action, the workbook guides users through 6 questions to help identify possible ways to use investing (personal, retirement, foundation, or donor-advised fund capital) to increase their impact on the people, places, and issues they care about:

  1. What are your philanthropic goals?
  2. What source(s) of capital do you want to use for impact investing? How much capital do you want to start with?
  3. What are your financial goals for each capital source?
  4. What impact investment solutions or tools might help you achieve your philanthropic and financial goals?
  5. How will you decide which impact investments to pursue? What criteria and due diligence processes will you use?
  6. How will you measure the success of your investments?

The workbook includes a concise primer on impact investing along with numerous examples of impact investments. It is intended to serve as a starting point for developing an impact investing strategy to augment one’s philanthropy, and could be used in consultation with financial, philanthropic, and other advisors. (Stay tuned for an annotated version of the workbook that advisors can use with their clients.)

The fundamental purpose of Invest for Better is to help women bridge the activation gap between their avowed interest in purpose-driven investing and the reality that only half of the “persuaded” are activating their assets in alignment with their values. We believe that women philanthropists are poised to narrow that gap and only need to develop the knowledge, confidence and support for implementation. We invite interested women to join our growing movement of Invest for Better Circles and/or to use this new workbook as a jumping off point for discussions with their advisors

Research conducted by the Women’s Philanthropy Institute found that women are more likely to use impact investing to complement their charitable giving, while men are more likely to use impact investing in place of charitable giving. This is important information and points once again to the need to focus on growing the number of women impact investors. Philanthropy plays vital roles in our civil society that cannot or should not be replaced by the capital markets. And capital markets play an essential role in scaling and sustaining solutions. We need all types of capital – philanthropic, impact-first, frontier, and market rate – to tackle critical issues facing our planet, and an ecosystem of smart investors who know how to use all the tools in their toolbox. We hope this new workbook contributes to that vision.