One of the main questions we get regarding impact investing is whether impact investing should be considered to be philanthropy with little or no returns or whether impact investing can be expected to have the same kind of returns that other investment opportunities on the market can offer. We like to think that with a good amount of deal-flow, we can provide a number of impact companies that are also great investments. Research from the Global Impact Investing Netowrk and J.P. Morgan corroborate this, with fully 65% of investors expecting market rate returns.
It’s interesting to note that 36% of those who indicated that their impact investments should return market rates also said that they would consider impact investments at below market rates. I think this is the general opinion of most Rockies Venture Club investors. They’re looking for market rate returns, but for impact companies with a great mission and an ability to demonstrate significant social or environmental impact, they are willing to consider a slightly lower return.
This attitude reflects the “triple bottom line” analysis that corporate CSR departments have implemented in which economic returns may be balanced with social environmental returns when proper metrics are in place to ensure a balanced return to the organization.
An interesting aside to this flexibility in returns for impact companies is an article in the November 25th Wall Street Journal citing a higher degree of happiness among those who regularly donated to philanthropic organizations. We hope that RVC investors who invest in impact companies have a quadruple bottom line return with economic, social, environmental and happiness impacts!
To learn more about Impact Investing and to hear speakers and pitches from Colorado 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