For all its faults, we may look back at 2016 as the year that impact investing was democratized. Once the exclusive domain of wealthy individuals and institutions, impact investing is now within reach of any American with $100 to invest—thanks to the passage of the JOBS Act and new investment vehicles like those offered by American Homeowner Preservation, StreetShares and new, easy to set up self-directed IRAs.
So what lies ahead for impact investing in 2017? We asked some of our favorite impact investing mavens—or, should we say, social change investing mavens?
“The time is now to align our money with our values, and to invest into the world we want to see and be a part of. Many more people will be waking up to their own and become conscious of their money, knowing that the bank they use and their 401(k) are all having an impact on our world. They will continue to vote with their dollars, choosing local businesses and solutions-focused companies with diverse leadership teams.
2017 will present great opportunities for investors as well as for product creators, and we will need to be careful for ‘green washing’ when it comes to choosing investment vehicles.”
– Kristin Hull, Director, founder, Nia Community Fund
“Over the past five years, there has been tremendous growth in the impact investing arena. There is also growing confusion. Five years ago, one estimate had that there were about $10 billion in impact investment assets in the market. In recent weeks, I read another that suggested there are now several trillion dollars of impact investment dollars. The market has grown, but not that much. What is happening is that more and more people are arguing that the investing they do should be counted as part of the impact investing pool. In 2017, I’m looking for organizations like Toniic, the GIIN and others to help us put clearer boundaries around what should and should not be considered impact investing.”
– Devin Thorpe, author & founder, Your Mark on the World Center
“Demand for impact investing continues to grow. In 2015, $15.2 billion USD was committed to 7,551 impact investments, according to a survey conducted by the Global Impact Investing Network. People want to do good. Crowdfunding has huge potential to leverage this desire by providing opportunity for everyday people to participate. We think that real estate is going to be a very important part of this trend. How better to make an impact in your community than by participating in its bricks and mortar?
We hope that Small Change is the leading edge of this trend. And we are certain that other platforms will emerge and tap into this desire to make more than a financial return.”
– Eve Picker, president & founder, Small Change
“Given the political situation at the federal level, impact investors will look at municipalities and states as local policy engines to further meaningful impact investing activity. This will come with the corollary, alas, of more private capital control over traditionally public spheres. We will need to be careful in navigating the intersection between making up for what the government is not doing, and further starving public services to the benefit of private capital.
The distinction should become clearer between impact investing in the sense of making money by solving problems, which is not really a different thesis from any other investment angle, and impact investing in the sense of deploying capital for meaningful social change. The former will be the direction of those who seek market or above-market returns, the latter will be for those who believe capital can play an important role regardless of the returns it obtains.
– Andrea Armeni, Executive Director, Transform Finance
“I see a significant increase in held wealth being unleashed into high value, better uses following the U.S. election and accelerated global trends. A clean money revolution will flower. The transition of capital from destructive uses to regenerative ones will gain momentum.
Big players will discover and ‘invent’ impact investing. As impact investing becomes the norm, ‘Social Change Investing’ or another deeper values term will emerge.”
– Joel Solomon, chairman, Renewal Funds & author, The Clean Money Revolution