The future of impact investing: a view from Asia

Andrew Milner

Within philanthropy circles, people are beginning to look beyond grants to the creation of a package of what might be called social finance, which will not only be bigger but will involve the kind of expertise traditionally considered the province of the financial industry. If the UN’s Sustainable Development Goals (SDGs) are to be achieved, massive sums need to be raised – the SDG Philanthropy Platform estimates a $2.5 trillion funding gap. How will foundations respond and what will the implications be for the character of future philanthropic institutions?

Much of the discussion that follows will focus on Asia, since the point of departure for this article is the prominence of the topic of impact investing at the recent Asian Venture Philanthropy Network (AVPN) conference held in Singapore. However, readers in many parts of the world will recognize the issues that impact investing throws up for devotees and sceptics alike.

Singapore minister of culture, Grace Fu, during her keynote speech at the AVPN conference.Singapore minister of culture, Grace Fu, during her keynote speech at the AVPN conference.

In any case, Asia is arguably the exemplar par excellence for the more varied use of capital for social ends. While much of the region is in the ‘emergent philanthropy market’ bracket, according to Karen Wilson of OECD, it is the most dynamic in the world when it comes to social impact investing, or SII as the OECD labels it. There are bills in the pipeline to support social entrepreneurship in India, Thailand and the Philippines. In Australia, the government of New South Wales has set up an office of SII. In Japan, the Sasakawa Peace Foundation (SPF) has launched an impact investment fund and the government is setting up a $150 million fund to support the development of the practice, while there are impact investing venture capital firms in Taiwan and Vietnam.

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