Impact Investing

Impact bonds are outcomes-based contracts that catalyse funding from “risk investors” to cover upfront working capital to deliver services. To improve the quality of education available for children in India, a goal aligned with the U.N.’s Sustainable Development Goals, the Quality Education India Development Impact Bond was formed.

No matter how one refers to it — “ESG” (environmental, social and governance), “responsible” or “sustainable” investing — the world is paying increased attention to investment decisions that include nonfinancial factors. Research examines if investment managers invest their clients’ capital as responsibly as they pledge to.

The Cambodia Rural Sanitation Development Impact Bond combines private and public capital with on-the-ground implementation expertise and market-based solutions to improve health and accelerate the Royal Government of Cambodia’s goal of universal sanitation. A finalist for the P3 Impact Award, it’s a public-private partnership changing the world.

Netflix is investing $100 million in financial institutions that support Black-owned banks and Black communities. This investment isn’t just socially responsible in fueling opportunity; research shows that Black-owned banks outperform non-minority-owned peers. How does that reconcile with data that imply decline in success? Lack of initial assets.

Grassroots organizations are engines for transformation but lack stable funding. To address these challenges, IAF and the Mott Foundation created a public-private partnership to put underserved communities in control of projects that improve quality of life, foster civic engagement and contribute to a more robust democracy in Mexico.

Lessons in philanthropy, investment and innovation: Rikers Island needed $10 million for a program to reduce the rate of teenage inmates returning to prison. With the innovative financing structure of the U.S.’ first social impact bond, New York, Goldman Sachs and Bloomberg Philanthropies leveraged private capital toward social solutions.

Opportunity zones offer investors the chance to reduce capital gains taxes by investing in areas high in poverty. But the legislation came with a small window of opportunity, and critics see a lack of visible development thus far. What’s the greatest chance of success for residents and investors? How can the challenges be overcome?

What is socially responsible investing? Is its increasing momentum sustainable? And are international commitments to ESG practices making an impact? Darden Professors Mary Margaret Frank and Pedro Matos discuss issues related to this popular phenomenon.

In this Three Things video, Darden Professor Elena Loutskina discusses three important aspects of impact investing.

The Goldman Sachs 10,000 Women initiative was launched as a $100 million initiative to foster economic growth by providing female entrepreneurs with business education and access to capital.