You’ve probably been hearing more about impact investing lately. According to Morningstar, the first half of 2020 saw a record $20.9 billion flow into sustainable funds. As we’ve written on the blog before, the global COVID-19 crisis, social unrest, and economic inequality have highlighted how connected we all are and how deeply we need more efficient systems. If you’re interested in learning more about impact investing, these three reads are a great place to start:
1. Real Impact: The New Economics of Social Change by Morgan Simon
Impact investing has been a hot topic within investment circles for a long time, and for good reason — when like-minded investors pool their resources with a single mission in mind, they have the potential to be a powerful force for good. But after nearly 20 years of leading and managing endowments and foundations, Morgan Simon has noticed that impact investing often comes up short. More often than not, she says, well-intentioned investors choose to address the symptom (for example, temporarily improving the circumstances of underserved communities) without treating the disease (for example, addressing the power imbalances in our economy).
In Real Impact, Simon breaks down why impact investing often fails to maximize its potential, proposes a new model and set of principles that might broaden its influence, and shares stories that bring these principles to life. She passionately argues that investing can be used to foster real, transformative change, and challenges the reader to help build a better economy and healthier world.
2. The Power of Impact Investing: Putting Markets to Work for Profit and Global Good by Judith Rodin and Margaret Brandenburg
Doing good in the world of and getting a return on your financial investment does not have to be an either/or proposition. Enter impact investing — an approach to investing that combines the desire for a financial return with the desire to produce social and environmental benefits. In their book The Power of Impact Investing, Judith Rodin and Margot Brandenburg map out what it means to be an impact investor, the range of investment opportunities that are available, and perhaps most importantly a chapter entitled “Getting Started” to help you, the investor, get launched. They bring a wealth of expertise to the topic and their passion for impact investing and the positive change it can produce is apparent throughout the book.
Their book is a call to action for those who are curious about this form of investing. As they point out, it may not be the right answer for everybody, but it is a way to harness the power of capital markets for social good. Not designed to replace traditional philanthropy or grant making, impact investing provides an additional tool in the battle to improve lives and solve some of the world’s biggest problems. Impact investing is a means of using capital to drive financial value and social and environmental impact simultaneously. In other words, you can have your cake and eat it, too!
3. Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas
This New York Times bestseller looks at how the global elite’s efforts to “change the world” actually preserve the status quo and obscure their role in causing the problems they later seek to solve. It’s an essential and fascinating read for understanding some of the egregious abuses of power that dominate today’s news. Anand Giridharadas takes us into the inner sanctums of a new gilded age, where the rich and powerful fight for equality and justice any way they can — except ways that threaten the social order and their position atop it. They rebrand themselves as saviors of the poor; they lavishly reward “thought leaders” who redefine “change” in ways that preserve the status quo; and they constantly seek to do more good, but never less harm.
Giridharadas asks hard questions: Why, for example, should our gravest problems be solved by the unelected upper crust instead of the public institutions it erodes by lobbying and dodging taxes? This book points us toward an answer: Rather than rely on scraps from the winners, we must take on the grueling democratic work of building more robust, egalitarian institutions and truly changing the world — a call to action for elites and everyday citizens alike. Once you get a taste of Giridharadas’ message and style, you may want to follow him on Twitter (@AnandWrites) and subscribe to his newsletter The.Ink (https://the.ink/). You can rely on him for a fresh, informed, original and intelligent take on today’s current events.
Impact Investing with The Humphreys Group
Let us know if you read one of these three books on impact investing! If you want to learn more about impact investing, reach out to our team today.
