It’s a common misconception that the only way you can have an impact is through financial donations to 501(c)3 charitable organizations. In reality, there are many ways you can make a difference when it comes to causes you care about. Impact investing is one such strategy and can help you grow your wealth while driving social and environmental change.
Impact investing is a strategy where you invest in organizations that are committed to driving social and environmental outcomes. The organization is responsible for setting, measuring, and reporting on metrics, so you can feel good about the investment you’ve made.
One of the challenges associated with giving back is determining how to balance saving for your future while also supporting the causes you care most about. Impact investing allows you to do both. Impact investing can have a broad range of returns that can align with your personal investment goals.
The key difference between traditional investing and impact investing is that the organization must set goals around their impact and report back to investors on the results. This provides accountability for investees and transparency for investors, all while driving transformational change.
How to Get Started with Impact Investing
Today, there are a variety of platforms available for impact investing that you can leverage. It’s a great idea to start by exploring your own interests. What do you care about? What causes are most important to you and your family? If you’re struggling to determine where to begin, consider taking a look at some of your favorite businesses and organizations and their philanthropic efforts. Once you’ve decided what you’re interested in, you can then start looking for investment opportunities that align with your interests.
OpenInvest is working to bring impact investments mainstream with their platform. You can use OpenInvest’s causes to personalize your profile based on your values. Their platform is designed to streamline your impact investment experience by providing impact reporting, proxy voting, tax optimization, and more.
Wefunder is a crowdfunding platform that is also a Public Benefit Corporation, meaning they’re a for-profit company with one or more specific public benefits as their statement of purpose. Wefunder originally set out to make investing accessible to all, which they did by lobbying for change from 2012 to 2021. Today, Wefunder makes it easy to find social projects to give to on their platform.
While online resources are a great way to find organizations you’ve never heard of previously, you can also look to your local community for startups to support. Giving locally is a great way to help your community prosper and can help you feel more connected to your area.
SMBX is a virtual small business marketplace connecting local investors to business owners in need of capital. Investing locally is a powerful way to drive real change in your community while building personal wealth.
It’s important to do research ahead of investing in an organization, just like you would when donating to a cause. Be sure to consider:
- Organization history
- The founder’s journey and the leadership team’s background
- The organization’s impact commitment
- Impact reports from previous years
- If they have any certifications, such as being a Certified Benefit Corporation™ or part of One Percent for the Planet
If you’re specifically looking to invest in a sustainable organization, be sure to review 5 Key Qualities of a Sustainable Business.
Impact Investing as Part of Your Philanthropy Practice
Practicing philanthropy isn’t just about donating to charity. A holistic approach to philanthropy includes charitable donations, volunteering, and impact investing. There’s no such thing as too small of a donation and investing to help achieve social good is an incredibly honorable act.
Evaluate what you have room for in your monthly budget after paying your bills and saving for key goals. Then, determine how you want to split allocate your investment budget. You may consider dividing your investments and allocating a certain percentage of funds for impact investments and using the rest for traditional investments.
Reach Your Savings & Giving Goals with bunny.money
bunny.money makes it easy to save for your next impact investment and donate to your favorite charities. You can donate to causes you care about right from the bunny.money app and the organization will receive 100% of your donation — we never take any fees!
bunny.money is live on Wefunder now. Contribute to our campaign today to help us bring fee-free giving to the masses.