logo
    • Magazine
    • Membership
    • Donate
  • Racial Justice
  • Economic Justice
    • Collections
  • Climate Justice
  • Health Justice
  • Leadership
  • CONTENT TYPES
  • Subscribe
  • Webinars
    • Upcoming Webinars
    • Complimentary Webinars
    • Premium On-Demand Webinars
  • Membership
  • Submissions

UN’s Sustainable Development Goals Positively Influence Impact Investing

Jim Schaffer
June 7, 2017
Share
Tweet
Share
Email
Print
“Rain Study 2” by Amanda Slater

June 6, 2017; Fast Company

Writing for Fast Company, Ben Paynter offers an update on how impact investing relates to the United Nations’ 2015 Sustainable Development Goals (SDGs). Paynter references the Global Impact Investing Network’s 2017 Annual Impact Investor Survey in making his point that the SDGs are serving to advance and shape this relatively new form of philanthropy. At least, this was the case for the 209 impact investing groups surveyed, which together have at least $114 billion under management. These investors (fund managers, banks, foundations, pension funds, etc.) committed $22.1 billion to 8,000 impact investments in 2016.

That’s not trillions exactly, but as startups grow up into global powerhouses that generate their own revenue and bigger impact, it may not need to be. The results show that more than half of the impact investing industry is intent on tracking returns directly against SDG-related targets. (Per the fine print: 26 percent do that now, with 30 percent posed to do so.) “We feel that the SDGs will act as a global framework that more and more impact investors will align with going forward,” says GIIN’s Research Director Abhilash Mudaliar, who notes that the UN guidelines have acted as a “clarion call” for the burgeoning industry.

NPQ watches the progress of the impact investing practice, concerned primarily with the “why” rather the “how.” Echoing this concern last year, a leader in this field, Morgan Simon, asked, “Where’s the Community Accountability in Impact Investing?”

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

I am concerned that in a drive for global scale in impact investment, we will lose the voices that should matter the most—the billions of people who will be affected by social enterprises funded by our investments. I am advocating for the establishment of effective mechanisms to empower “beneficiaries” to be actively involved in the planning, execution, governance, and ownership of enterprises, and in the flows of capital connected with them.

Paynter’s observation that impact investors are aligning their commitments toward meeting the SDGs complements Simon’s concern that impact investing engage beneficiary communities more as leaders and change agents than merely as producers or consumers. Investors are increasingly willing to consider the value of long-term impact over short-term financial gain. Even though the GIIN annual survey shows that “the overwhelming majority of respondents reported that their investments have either met or exceeded their expectations for both impact (98 percent) and financial performance (91 percent),” the SDGs are thankfully serving as worthy guideposts as more investors move into the impact investing space. Paynter adds, “The annual cash flow is expected to jump another 17 percent, to around $26 billion next year.”

Impact investments are typically made in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and basic social services such as housing, health care, and education. NPQ has noted how the Roman Catholic Church and at least the previous administration’s U.S. Department of State are endorsing and/or exploring impact investment opportunities. In April, NPQ reported on the Ford Foundation’s $1 billion commitment to mission-related investments. For all of these investors, their financial returns will range from below market (sometimes called concessionary) to risk-adjusted market rate. Investments will be made across asset classes, from cash equivalents to fixed income and venture capital. In each case, risks are being taken for the sake of positive social and environmental performance and progress. The practice of impact investing is building what could become a preeminent field of philanthropy.

Several days ago, Paynter wrote about the 14 billionaires who recently took the Giving Pledge. Today, David Brooks, inspired by the same subject, imagined for his New York Times readers how he would give away a billion dollars. Impact investing does not yet appear to be on any of their agendas. Nevertheless, with just eight billionaires possessing more wealth than the poorest half of the world’s population (3.6 billion people), it is not a small thing that impact investing is catching on. That the UN’s SDGs offer some degree of social conscience to the trajectory of these investments today is a small solace.—James Schaffer

Share
Tweet
Share
Email
Print
ABOUT THE AUTHOR
Jim Schaffer

The founders of Covenant House, AmeriCares, TechnoServe and the Hole in the Wall Gang Camp were my mentors who entrusted me with much. What I can offer the readers of NPQ is carried out in gratitude to them and to the many causes I’ve had the privilege to serve through the years.

More about: United Nationsfinancial sustainabilitygiving pledgeGlobal IssuesImpact investingNonprofit NewsPhilanthropyPolicy

Become a member

Support independent journalism and knowledge creation for civil society. Become a member of Nonprofit Quarterly.

Members receive unlimited access to our archived and upcoming digital content. NPQ is the leading journal in the nonprofit sector written by social change experts. Gain access to our exclusive library of online courses led by thought leaders and educators providing contextualized information to help nonprofit practitioners make sense of changing conditions and improve infra-structure in their organizations.

Join Today
logo logo logo logo logo
See comments

NPQ_Winter_2022Subscribe Today
You might also like
Why Social Change Films Matter
Cyndi Suarez and Saphia Suarez
Philanthropy Must Move from Charity to Solidarity
Son Chau
Eliminating Biphobia Through Breath, Brotherhood, and the Arts
H. “Herukhuti” Sharif Williams
Using a Data-Driven Strategy to Advance Racial Equity in Grantmaking
Heather Lenz, Ariel Jordan and Catherine Smith
Cancelling Student Debt Is Necessary for Racial Justice
Kitana Ananda
To Save Legal Aid, Expand Public Service Loan Forgiveness
Zoë Polk

Popular Webinars

Remaking the Economy

Black Food Sovereignty, Community Stories

Register Now

Combating Disinformation and Misinformation in 21st-Century Social Movements

Register Now

Remaking the Economy

Closing the Racial Wealth Gap

Register Now
You might also like
Why Social Change Films Matter
Cyndi Suarez and Saphia Suarez
Philanthropy Must Move from Charity to Solidarity
Son Chau
Eliminating Biphobia Through Breath, Brotherhood, and the...
H. “Herukhuti” Sharif Williams

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Independent & in your mailbox.

Subscribe today and get a full year of NPQ for just $59.

subscribe
  • About
  • Contact
  • Advertise
  • Copyright
  • Careers

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.