By Aisha Abdelhamid
With more impact investing opportunities opening up to “retail” investors, savvy working folks are measuring the potential social and environmental impacts of their investments along with potential financial returns.
Appealing to those among us without ultra-high net worth status, retail impact investing offers easily attainable financial products achieving highly tangible results that are positively impacting the communities, issues, and ideologies that we deeply care about.
Millennials & Women Are Leading In Impact Investing
A recent Morgan Stanley report, Sustainable Signals, finds that 71% of active individual investors are interested in impact (or sustainable) investing and 65% see sustainable/impact investing becoming even more prevalent in the coming 5 years.
Particularly among younger working stiffs, Morgan Stanley reports that Millennials are nearly twice as likely (22%) than the total investor population (12%) to invest in funds targeting specific positive impacts such as environmental and/or social outcomes.
This matches with recent findings of the Global Sustainable Investment Alliance (GSIA), which reports that 75% of Millennials are guided by environmental, social, and/or political impacts when they invest, compared to only 46% of Baby Boomers. Similarly, GSIA reports that 75% of women consider positive ethical impacts when investing, compared to 60% of men.
Remedying Many Of The World’s Most Dire Predicaments
As summed up by the Global Impact Investing Network (GIIN), “Impact investing has the potential to unlock significant sums of private investment capital to complement public resources and philanthropy in addressing pressing global challenges.”
Simply put, by providing desperately needed capital, many of the world’s most dire predicaments are being remedied via the growing impact investment market. Alongside a financial return, impact investments help fund organizations, companies, and funds focused on generating positive environmental and social impacts in a wide variety of market sectors.
Effective in both emerging and developed markets, sectors benefitting from impact investing include renewable energy, sustainable agriculture, microfinance, and affordable education, housing, and healthcare services.
GIIN notes that the impact investment market is exploding as more investors are looking for ways to integrate positive impacts and values into their investing. A recent annual Impact Investor Survey conducted by GIIN questioned respondents on returns and a whopping 98% reported their returns met or exceeded their expectations in terms of impact. In terms of performance, 91% of respondents reported their expectations were met or exceeded.
The GIIN survey reported a total of $114 billion in impact investing assets, which it considers the new “best available floor for the size of the impact investing market.”
5 Impact Investing Opportunities For Savvy 9-To-5ers
Want to integrate positive values and impacts into your own personal investing? The following five US-based impact investing opportunities represent savvy retail options that are very appealing on so many levels. Transparency is a critical factor in this compilation, as basic information must be offered in a clear and upfront manner.
Looking for minimum investment amounts, account fees and terms, stated earnings information, investment product details, actual projects funded, and the like shouldn’t be a chore, much less a mystery. Additionally, not all retail impact investment platforms are currently accepting new investors, so careful research to find open investment opportunities is a must.
The following choices represent five impact investing opportunities currently open to individual US-based investors looking for modest minimum investment amounts, potentially reasonable financial returns, and really awesome social and environmental impacts:
Based in Boulder, Colorado, Wunder* is making impact investing dead simple for all of us crazy-busy working stiffs who want to do something significant with our money. Offering solar investment funds with a minimum investment amount of $1,000, Wunder actively manages everything from A-Z. From the sourcing of commercial solar opportunities to the underwriting, contracting, and construction of each project, Wunder’s got it covered. Then, when newly constructed projects go live, Wunder manages the rest of the story from ongoing operation and maintenance of arrays to billing energy customers and distributing proceeds to solar investors.
This nonprofit firm is based in Bethesda, Maryland, and offers Calvert Community Investment Notes directly from its website with a minimum investment of $20. One- to 10-year notes support impact enterprises in the US and developing markets across a variety of sectors from education to microfinance. Initiatives supported include gender equity, local investing, support for the elderly, investing and heritage, and faith and investing. More than 18,000 investors have invested more than $1.5 billion through the Calvert Community Investment Note since 1995.
Home-based in San Francisco, California, RSF offers investment opportunities with a minimum investment amount of $1,000 and a current interest rate of 0.75%, reset at the beginning of each quarter. Built on over 30 years of pioneering experience in social finance, RSF funds nonprofits and for-profit firms working toward social, economic, and ecological benefit. Sustainable agriculture, land preservation, renewable energy projects, women-owned businesses, and charter schools are just a few of the social enterprises that impact investors with RSF can help nourish and support.
San Francisco–based Aspiration offers an online impact investment platform appealing to everyday folks looking for professionally managed funds that are 100% fossil free. The minimum investment amount is $100. Aspiration states that it donates 10% of every dollar earned to successful charities focused on bringing economic opportunity to struggling Americans. One such partner is the Accion U.S. Network, America’s largest provider of micro-loans, helping bring about transformation in American communities.
OpenInvest, an online investment platform offering socially-responsible impact investments for retail investors, has an account minimum of $3,000. Based in San Francisco, California, OpenInvest wants to drive changes in society by reshaping the economy. It’s working on this by taking aim against repugnant dilemmas such as fossil fuels, carbon emissions, oil pipelines, deforestation, tobacco, gender and diversity bias, manufacturers of weapons, and Donald Trump.
Impact Investing Makes You Smile Like A Superhero
At the top of the list, Wunder Capital takes the lead in our eyes with its totally transparent coverage of hard science, practicalities on the ground, and risk evaluation processes. Founded in 2013, Wunder won the US Department of Energy’s 2014 Sunshot Challenge and the 2015 Summit Award from Colorado Solar Energy Industries Association (COSEIA). With a solar project team assembled from DOE researchers and standard-setting industry leaders, Wunder Capital offers curated diversified solar portfolios of thoroughly vetted solar investments perfectly geared to cleantech-savvy 9-to-5ers.
Not only helping to combat global warming–related climate change by curbing CO2 and other greenhouse gas emissions, impact investments in Wunder solar funds can earn up to 8.5% annually. Returns are generated as solar loans are repaid, securely backed by strong businesses and essentially unlimited sunshine.
You will smile as your financial returns are seamlessly deposited directly into your bank account. And this is even better: Knowing that your impact investments are helping tackle some of the world’s most pressing challenges, even while your boss is breathing down your neck you’ll be smiling like a superhero.
Remember, past performance is not indicative of future returns and results are not guaranteed. Before making any investment it’s important to make sure that you read all offering materials to ensure that the investment is a good fit for your objectives.
*This post is supported by Wunder, which we think is doing great work.