Impact investment has the potential to transform economies and societies, say its advocates. But the growing field is littered with examples of good intentions gone wrong—often the result of a “top-down” approach.
How can impact investors avoid unintended consequences and ensure that their investments are aligned with the goals and needs of the people and communities they seek to support?
With impact investing on its way to becoming a trillion dollar market, it’s not a trivial question. And it’s one that has preoccupied Morgan Simon, an impact investing pioneer who helped create the Responsible Endowment Coalition as a college student and went on to be the founding CEO of Toniic, a network of impact investors.
In 2014, Simon (pictured above at SOCAP16), cofounded the nonprofit Transform Finance to address the misalignments she was seeing in the impact investing field and to hold investors to a higher standard. The Transform Finance Investor Network includes foundations, investment funds and family offices focused on what she calls “a social justice approach”—addressing issues of economic and racial inequality around the world.
Through the Transform Finance Institute for Social Justice, Simon and her team provide training to mission-driven organizations that covers everything from developing equitable employment practices to pitching opportunities. Most important, says Simon, is learning about revenue-generating strategies and how to “hold investors accountable.”
Next month, the Institute will hold a three-day training session in New York City for social justice leaders and entrepreneurs.
“Investors need to have a deeper connection to the community in which we’re going to work to even know what impact we want to go after,” says Simon, who is also the author of the recently published book, Real Impact: The New Economics of Social Change (Perseus Books, 2017).
“Investors want to invest, but don’t always know what’s really needed,” she says.[…]
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