Impact investing appeals to a variety of investors because it balances commerce and compassion. It also offers a broad range of options; some strategies emphasize financial return while still seeking to benefit society. Other approaches put social impact first, accepting returns that vary from below-market rate to a simple repayment of principal.
Whatever the interest of an investor, finding one’s place along the spectrum is a key consideration. While the approach depends on the investor, there remain two key elements to any impact investment: intentionality and measurement. The investor’s intention needs to include some element of both social impact and financial return. And while there is more standardized metrics for financial returns (i.e. ROI), investors should also aim to measure the social impact. To do this, we recommend you refer to the GIIN’s IRIS+ system. It is the most commonly accepted system for measuring, managing, and optimizing impact.