The coronavirus pandemic has seen record sums of institutional cash flow into sustainable investment funds, and awe-inspiring acts of philanthropy both locally and nationally. But is there a middle ground for individuals that wish to invest directly in expanding business models that do good in a sustainable way? Is investing outside of banks and stock markets really just for the professionals, or can individuals find ways to invest their savings in social and community enterprises to scale their impact?

In this panel discussion our Lead Expert Jamie Broderick spoke to Daniel Brewer, Chief executive at Resonance, Lyn Tomlinson, Head of impact and philanthropy at Cazenove Capital and Vidhya Alakeson, Chief executive at Power to Change.

Key messages from the discussion

Impact investing is not just for institutions, like pension funds. There are many different channels that individuals can use to invest their money for impact. The two main routes for individuals are:

  1. Working with a financial advisor who can help you allocate a portion of your money to impact investments, which take advantage of tax reliefs such as Social Investment Tax Relief;
  2. Investing independently through crowdfunding and community shares platforms such as TriodosEthex and Crowdfunder.

Financial advisors have an important role. Impact Investing may be a new area for both individuals and financial advisors, however the advisor’s role is to guide individuals on how to invest for impact.

  • Get educated. To advise their clients effectively, financial advisors need to further educate themselves in order to assist their clients in making the most informed decisions. Philanthropy Impact and Worthstone are two of the many good educational resources available.
  • Ask questions. Individuals should talk to their financial advisor about the issues they care about and communicate their values so that their investment can be aligned with them. Don’t give up. Ask the questions needed to access the information required to be comfortable making that investment.

Community-based investing is on the rise. As we are becoming more embedded in our local communities due to the pandemic, community-based investing is becoming more popular among individuals. With interest rates on savings being so low, the returns that are possible through community-based investing are more attractive.

Philanthropy and impact investing have different financial and social goals, but both are intentionally striving for impact. Impact investing is a complementary and powerful tool to an individual’s philanthropy.