How You Can Make A Difference (And Money) With Impact Investing

With impact investing, you can make an investment in an organization with a mission of providing a positive environmental and social impact and receive a significant financial return. Impact investment opportunities can be found in developing and emerging markets.

What Is Impact Investing?

The goal of these type of investments is to improve business and growth opportunities for socially minded businesses. The businesses role is to provide you with two types of returns on investment: your desired social or environmental outcomes and financial capital.

Organizations looking for impact investors will present a clearly defined objective. The goals of impact investing can include, but aren't limited to, improving education, reducing crime, increasing job opportunities, and sustainable agriculture.

How Can I Start Impact Investing?

While most capital for impact investing comes from large, socially or environmentally conscious companies or corporations, it is possible to invest on your own. Consider the following:

Mutual funds

This is considered the easiest way to begin impact investing. There are various mutual funds that promote environmental and social improvements. Once shares of these mutual funds are purchased, an investor will make money on their capital growth or dividends.

Sustainable Agriculture

This involves making investments with local growers who provide their products directly to customers. It removes the step of shipping, processing, and provides fresh food. It's possible to join an investor network and provide money for individuals to purchase land, equipment and other items. Look into community supported agriculture (CSA) initiatives in your community.

Microfinance

These are very small loans provided to people or businesses in underdeveloped countries. The money provided usually helps with startup costs, like building renovations or buying land. There's no need to find these people as there are organizations dedicated to connecting them with investors.

Energy

Invest in energy efficiency by purchasing shares of companies dedicated to providing alternative energy. This includes businesses focused on providing solar energy, wind energy, or efficient building materials. Many of these companies are traded on the exchange.