Philanthropic investing?

Impact-Investing1December is the month in which 25% of American philanthropic dollars are donated.

December is also a month in which investors are making investments, balancing

portfolios and taking profits and losses for tax purposes.

This is a time for investors to be asking themselves whether they can accomplish their

philanthropic and investing goals at the same time.

 

Impact investing has become increasingly popular not only for foundations and family

offices, but also now for individuals.

 

What is “Impact Investing?”

 

The term Impact Investing has been coined to describe investments that have social or

environmental impacts in addition to the economic impacts for the investor’s portfolio.

There has been much debate about what constitutes an Impact Investment though,

since even the most profit minded investment may help communities with job growth

and possible environmental benefits. Sophisticated impact investors typically use

metrics to evaluate the potential social or environmental impacts, and individuals have

access to these as well, though individuals more often rely on a gut feeling to tell them

which investments they prefer.

 

Another debate in Impact Investing circles is how much, if any, reduced profit

expectations should the investor have when making impact investments. Corporate

investors and CSR (Corporate Social Responsibility) programs have developed

sophisticated guidelines for balancing the costs of social and environmental impact with

expected financial costs or returns. They use a “Triple Bottom Line” system to measure

social, environmental and economic impacts of their decisions. Individuals may use

their own guidelines that may apply to all impact investments they make or which may

be applied on a case by case basis. I have seen everything from “I’m just hoping to get

my money back some day” to those who show preference for impact investments, but

who also expect the same types of returns relative to risk that they would see on the

rest of their investment portfolio.

 

At Rockies Venture Club, we hold an impact investing event on the second Tuesday

of every December. We recruit expert speakers on the topic as well as four impact

companies seeking early stage investment. The criteria we use are very close to those

that we use every month when evaluating venture companies for investment. The

companies should have experienced and capable teams, a disruptive technology,

product or service, and a substantial market demand. The outcomes we’re looking for

include an “exit” for investors within about five years with a potential return of up to ten

times the original investment.

 

Rockies Venture Club also supports EFCO (the Entrepreneurs Foundation of Colorado)

Which helps start ups to donate one percent of their founders stock to community

organizations. In this way every company that achieves a successful exit can be an

impact company.

 

To learn more about impact investing and to meet the founders of four great impact

companies, consider attending the RVC Impact Investing event Tuesday, December 10th 5:00-7:30PM at the Colorado State University Denver Center Event Atrium 475 17th Street, Suite 200 Denver, CO. Click Here to Register

http://rockiesventureclub.wildapricot.org/Default.aspx?pageId=1349467&eventId=698729&EventViewMode=EventDetails

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