There has been increasing enthusiasm for social change over recent years. It ranges from improving the quality of life of the underprivileged to protecting the environment to combating climate change and so on. With this appetite comes the rise in interest in impact investing. However, there are concerns that it might displace traditional charitable donations.
According to The Global Journal, there are 10 million nongovernment organizations in the world. The National Center for Charitable Statistics adds that over 1.5 million of these are in the United States. In 2015, 31.5 percent of the people worldwide donated to charity while 24 percent volunteered. The Charities Aid Foundation says around 2.5 billion people will donate to charities by 2030. Giving to NGOs is an easy way for people to be involved in positive social change, via the 2017 Global NGO Online Technology Report.
But there is another way to help bring in social change while also getting something in return—impact investing. By definition of Global Impact Investing Network, it is the “investment made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.”
A recent study found that both men and women are embracing impact investing as a means of giving back to society while also gaining financial returns. However, men are more likely to replace their charitable giving with impact investing compared to women. On the other hand, women are more likely to combine impact investing and charitable giving than men, via ThinkAdvisor. The study was conducted by the Women’s Philanthropy Institute and funded by the Bill & Melinda Gates Foundation.
Youth, causes drive impact investing up
Impact investors today are dominated by millennials and Gen X groups (42.7 percent). Baby boomers (35.1 percent) and older people (22.9 percent) follow. Impact investors are also mostly college graduates and with household incomes of $500,000 or more.
The study further revealed that among the sectors that are most likely to be affected by impact investing replacing charitable donations are the youth and family services, arts and culture, environment, and animal causes.
Furthermore, the report said nonprofit organizations should rethink about impact investing and how they can utilize it as an additional tool rather than as a replacement of the traditional charitable giving.
“By exploring how men and women approach impact investing, our findings can help nonprofits better navigate this new universe while also providing donors, wealth advisors and families the opportunity to evaluate where impact investing fits in with their broader wealth and philanthropic strategies,” said Women’s Philanthropy Institute director Debra Mesch.
Charity and social impact investment should work together, Sonal Shah, the founding executive director of Beeck Center for Social Impact & Innovation, wrote in The New York Times. Shah pointed out that we need both charities and investment because they have their own critical roles.
Charities are important and effective in meeting immediate needs, such as food, shelter, and sanitation. Social enterprises can be more effective in promoting long-term sustainability through job creations and entrepreneurship.
Hence, combining impact investing with charitable giving is the better way to go, rather than displacing one. Together, they can drive real changes that will last long.
(Featured image via DepositPhotos)
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [Buffalo Partners]
First, they came for your college campuses. Then they came for your news, your politics, and you entertainment. And now,...
Redeban Boosts its Leadership in Colombia with the Acquisition of SoyYo
The SoyYo brand will be maintained and enters Redeban's portfolio as one of its strategic units. SoyYo is a recognized...
Why the Growth of Real Estate Crowdfunding in Mexico Slows in 2023
An amount that could make real estate crowdfunding more attractive is 500 million pesos or more. Likewise, he added that...
Biomedical Companies in Spain Demand Tax Incentives for R&D Adapted to the Reality of the Sector
There are many companies in the biomedical sector that, being in the investment or expansion phase, have negative or reduced...
Switzerland Will Probably Legalize Cannabis in the Next Four Years
Switzerland has the advantage that it has already introduced legalization tests in various municipalities. Each test can cover up to...
Cannabis1 week ago
Hawaii Lawmakers Have Approved a Bill to Legalize Cannabis for Adults
Impact Investing1 day ago
Medical Microinstruments Raises an Impressive Amount of $110 Million
Impact Investing2 weeks ago
How Solar Energy Electrifies Communities: The History of CERTosa
Business4 days ago
The Dow Jones 10 Utility Bond Average: A Tale of Woe from 1938 to 2002