Philanthropy as Investment: Potential Benefits to Viewing Nonprofit Funders as Impact Investors

The concept of “investing for social good” has become increasingly prominent and now encompasses philanthropy, concessionary investing (where investors expect to receive an investment returns less than the market rate of return in exchange for evidence of positive social impact) and market rate investing (where investors expect to receive a similar investment return as if they had made a traditional investment). An impact investor is usually defined as a capital provider that invests in businesses and companies that have some element of social or environmental impact as part of their business model. In this way, financial returns from the businesses should also correlate with positive social or environmental “returns”.