Evolving Impact Investing:
The Current Negatives and Important Future of Investing in the World We Live in
By Bobby Keough
June 12, 2018
Why does it seem that in life the choices we seem to be left with are make a profit or help the world; why can’t these concepts co-exist? It seems nearly impossible to align one’s investing philosophies with one’s personal values. Typically, being socially responsible and making a profit simply don’t go hand in hand. If government and philanthropy aren’t enough, how can we use capitalism as a force for social change?
The future lies in Impact Investing, a space that is rapidly growing and changing as the world around it is becoming more and more socially minded by the day. At a recent Family Office Association event, Chris Knapp, CEO of Collaboration Capital, shed insight on how he uses the concept of environmental, social and governance (ESG), the three central factors in measuring the sustainability and ethical impact of an investment in a company or business, to guide him in how he invests. He followed this by providing examples of some of the companies he and his investors have gotten involved with.
The first he spoke on was High Line Network, a company that reimagines underutilized preexisting infrastructure into new urban landscapes that benefit the community. He listed a number of projects the company has worked on, including taking an old airfield and turning it into a community cycling center. This not only helps to clean up the community and provide a safe new space for families to spend time, but it drives a resurgence of local business.
The third and final company that Chris used as an example was NextSeed. NextSeed is a platform that allows for local business to get funding from members within their own community through flexible debt financing. Similar to Kickstarter or GoFundMe, members of the community can choose to invest money into the company through a simple online platform with investments of as low as a $100 minimum. What sets this apart from the other crowdfunding platforms out there however is the fact this is truly an investment, not a fund raising donation, meaning one receives a revenue share in return.
The second company he touched upon was Sixup, a company that provides college loans to high-achieving students who have little to no credit. While colleges do help with financial aid, that aid typically falls short, leaving many students to struggle with a way to make the rest of their payments. Sixup fills that gap and helps to aid deserving students walk across that graduation stage, adding valuable educated members to the community and workforce.
It seems impossible to combine money making with helping the world, but as more and more socially minded companies pop up it is becoming easier and easier for an investor to put their money into a place that will not only give back to the community but will give back a return on investment. Together we can use our money to change both the investment world, breaking stigmas around impact investing, and forging a better world, while still making money ourselves.