Our vision at the Impact Investing Institute is for capital markets that are fairer and work better for people and the planet. We see impact- driven investment by charitable endowments as integral to that transformation. With support from the Department of Digital, Culture, Media and Sport and Esmée Fairbairn Foundation we have created materials to support charitable endowments as they consider this approach to investing and seek inspiration to get started.
For the Impact Investing Institute, impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Investments can be across asset classes, in both emerging and developed markets, and target a range of returns from below-market to market-rate, depending on the investors’ strategic goals.
When discussing charitable endowment investments specifically investors are often focused on risk-adjusted market rate return opportunities. The Association of Charitable Foundations terms this sub-category as “impact- driven” investing: in the US this approach is referred to as Mission Related Investing.
As this is an emerging field of practice, and there are no mandated definitions of impact, many impact investors use different terminology to refer to similar concepts. Where possible in the case studies below we have attempted to clarify the definition in use.