Impact Investment Needs Time To Develop

Impact Investment Needs Time To Develop

We allowed micro-finance and the venture capital industry the time and space to develop over a few decades. Surely we can do the same for impact investing.

  1. First, impact investing needs time to develop.
  2. Second, in addition to time, the sector needs a framework to measure success, one that makes sense of the sector’s inherent diversity.
  3. Third, the sector needs practical, widely-adopted, and standardized tools to measure social impact.

Sir Ronald Cohen and HBS Professor William A. Sahlman describe impact investing as the new venture capital, implying that it will, in the next 5 to 10 years, make its way into mainstream financial portfolios, unlocking billions or trillions of dollars in new capital.

African and US markets tend to both agree with this premise—investors aren’t quite sure how to wrap their heads and pockets around impact investing just yet.

In the coming years, as case studies and new innovation occurs in the space, we anticipate impact investing to be a strong play for business and non profits to design and structure their initiatives moving forward.

For more reading and in depth commentary, read Harvard Business Review’s post here and Sasha Dichter of Acumen’s post here.

(photo via gmacorig)