So you want to make a positive social impact with your investments?
Updated: May 16, 2021
You can move your money into sustainable investment funds - limiting or avoiding negative environmental and social impacts from your investments. But what if you want to make a positive, measurable social impact with your investments?
Institutional investors -- such as pension funds, governments, faith-based organizations, and banks -- and high-net-worth individuals have long been able to do this. They fund US small businesses through Community Development Financial Institutions (CDFIs), social ventures through impact-focused venture capital, and small and growing businesses in low-income countries through private equity. But retail investors, which we define as investors who do not fit the definition of an accredited investor, have far fewer options.
A few organizations have been offering impact-focused investments for retail investors for decades, and others have used new regulations, such as Regulation A+ and Regulation Crowdfunding, to offer accessible retail investments.
In this research brief we look at the niche US retail impact investing market, identify the players, and describe how they interact.
Our main findings:
Interest in impact investing is growing exponentially, despite the pandemic;
We are one of just a handful of impact investing organizations in our niche;
This is a cooperative market.
Investors want to align their funds with their values, and only a few organizations provide ways to make a positive social impact. Organizations in this cooperative market are interested in growing the pool of retail impact investors. They partner with each other, invest in each other, and work to increase awareness of and interest in impact investing. Each one of these organizations moves investments and/or philanthropic capital from individuals into impact investments.
Oikocredit US is in good company among these impactful organizations: Beneficial Returns, Calvert Impact Capital, Capital Impact Partners, CNote, ImpactAssets, Impact Charitable, Iroquois Valley Farmland REIT, Kiva, PV Grows Investment Fund, Realize Impact, Reinvestment Fund, RSF Social Finance, Working Capital for Community Needs, Zidisha.
To see our full findings, check out the research brief here: