Earlier this month Kerry Hannon wrote an article for Forbes.com on the relatively new initiative amongst investors, impact investing. Impact investing is essentially choosing to invest in ventures which support initiatives or causes that you believe in. Whether it be a global or national challenge, you’re choosing to invest in a company that’s helping a greater good through stocks or bonds. These types of investments are not only beneficial to your financial future, they’re in many ways more greatly beneficial to the world around us.
In the article, Hannon references U.S. Trust’s 2015 survey which “found that roughly a third of high-net-worth investors either own or are interested in owning social-impact assets.” The survey consisted of 640 high net worth adults nationwide, with at least $3million in investable assets. U.S. Trust concluded that while there is strong desire to give back through impact investing, there is a lack of understanding amongst those who were opposed. Among those not interested in impact investing, 23% said they were unwilling to accept lower returns while 10% admitted to not fully understanding impact investments.
Hannon goes on to share with readers that the return on investment doesn’t “have to be subpar”. For that 23% who were unwilling to accept lower returns, they might be happy to know that Calvert Equity, which Hannon points out to be “one of largest and oldest socially responsible mutual funds, gained over 10% in the past five years. She goes on to shed light on several other impact investments that had upwards of a 10% return. So these companies, whose focus might be world poverty or affordable housing, are working towards making a huge social-impact and ultimately might surprise you in your return on investment.
It’s rather refreshing to know that “the wealthy” are becoming increasingly involved in such philanthropic efforts, although it’s still more refreshing to hear of people giving back without the expectation of return. It’s so important to simply give outside of the transaction mindset. Supporting a greater good, whether it be through investments, donations, or simply volunteer work is always an admirable trait; however, as Kerry Hannon wrote, “I think the most impactful investments I make are with my time.”