What is Impact Investing and Why it Should Matter to You?
When we talk about impact investing, we are talking about investments that are made with the intention of making a difference while also generating a healthy return. The basic idea is to have a positive impact on society or the environment while also generating the return that is associated with a traditional investment.
What Does Impact Investing Mean For the Investor?
Someone who is considered to be an “impact investor” is someone who actively seeks out investment opportunities that don’t only focus on return. These individuals are dedicated to having a measurable impact on society or on the environment and so they invest their funds in nonprofits, businesses, and industries that also focus on having an impact and creating change.
For example, an impact investor may choose to invest their funds in a renewable energy company that shows promise. A traditional investor would only concern themselves with the promise of the renewable energy company to generate a profit. The impact investor, however, is also interested in the ability of renewable energy to reduce pollution, reduce dependence on energy sources that are depleted when used. Energy sources like fossil fuels.
WHY DOES AN IMPACT INVESTOR CHOOSE THE IMPACT INVESTMENT?
Many times, an impact investor chooses a particular investment because it is a good investment overall. Newer and more sustainable types of companies are more in demand by an increasingly socially conscious consumer and so they project incredible growth and return on investment. With that said, however, the impact investor is also one of these more socially conscious individuals, they want to know that their funding is going towards more than just making a profit. Impact investors want to know that their money is helping to create the change that they want to see in the world.
What Does Impact Investing Mean For the Entity Being Invested In?
Impact investing is a way for a socially or environmentally conscious business to gain the funding that they need to grow and to have the social and environmental impact that they seek. Companies that can benefit from impact investments are those that are devoted to a cause and they reflect that devotion through products, services, or partnerships with organizations that make change happen.
For example, a local low-cost health clinic may seek out an impact investor to fund their newest clinic in a neighboring town. As a low-cost clinic, funding is scarce and so building a second location would be next to impossible without the assistance of an investor. However, a traditional investor is less likely to invest in such a project because their return on investment is going to be lower than if they were to invest in a client with more opportunity for growth and monetary gain. The impact investor, however, sees that the return on investment may be lower than it would be with another investment opportunity, however, they also recognize that their money is being used for the social good. They are making an impact.
WHY DOES A BUSINESS CHOOSE TO BE A COMPANY THAT NEEDS AN IMPACT INVESTOR?
You may be asking yourself why a company would dedicate themselves to being the type of company that makes less profit in return for having a social impact. The simple answer is that for some people making a change, changing the lives of others and the world around them, is worth just as much if not more than having a larger paycheck. These individuals are who society refers to as the “helpers” and without those helpers, many of us would go without having our very basic needs met.
How Can You Become an Impact Investor or Find an Impact Investor?
So, how do you go about becoming an impact investor or finding an impact investor to help to fund your nonprofit, your company, or your upcoming project? The answer lies in the services of a strategic advisory group like CLC Global Advisors.
At CLC Global Advisors we focus our efforts on bringing together impact investors and those in need of impact investments. Our concentration on government, healthcare, real estate, and technology investments and businesses also allows us to exercise our personal interests in creating positive change in these niches. This goal is of particular importance to our company head, Carole Crist, who has dedicated ten years of her life to public service as well as spent twenty-five years of her life as an accomplished businesswoman.
If you would like to find out more about how CLC Global Advisors can help you with your impact investment needs reach out via phone 917.226.3961 or fill in our online contact form and we’ll get back to you right away!