Investors targeting market-rate returns through impact investments risk overlooking the needs of the enterprises attempting to solve global poverty. Such “have your cake and eat it too” expectations can “undermine the meaningful role [impact investing] can and should play in poverty reduction,” writes Oxfam’s Mara Bolis in an introduction in NextBillion to a new report from Oxfam and Sumerian Partners.
Impact Investing: Who Are We Serving? proposes some good ideas for returning the industry’s focus to impact.
Develop investment vehicles, such as permanent-capital vehicles and evergreen funds, that meet the needs of enterprises combatting poverty. Be transparent in reporting performance. Deploy smart subsidies alongside investors seeking net financial returns. Bolster research to understand how investments can help businesses maintain their commitment to impact. Adopt incentives that encourage optimizing impact — and adhere to a code of practice that prioritizes it.
Oxfam’s Bolis and Sumerian’s Chris West will join Toniic’s Lisa Kleissner, Duke University’s Cathy Clark, and Arabella Advisors’ Julia Sze to debate the report on Friday at the Skoll World Forum.
This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.
Photo credit: Oxfam
