I know, I apply, I share – but sharing is most important for the responsible investor

 

Jenny Conrad

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Jenny Conrad

‘Nobody does philanthropy to feel worse’ was one of the comments made at the 43rd Social Investor Breakfast Club. Tuesday’s meeting in London featured discussion around two groups interested in social impact: individual investors and donors.  With increasing numbers of ways to have a positive social impact on the world, individuals with similar motivations can choose to donate or invest. However, as those sharing their experiences demonstrated, how their funds are used is often best tailored to the individual. 

Etienne Eichenberger of WISE Philanthropy Advisors got things started by introducing the mission of Sustainable Finance Geneva (SFG), which aims to promote common interest among individuals involved with sustainable investment. As social responsibilities are assigned to institutions but carried out by individuals, SFG has created Individual Principles for the Responsible Investor (IPRI) as a tool to help develop a ‘responsible financial sector that benefits the economy’. These three simple principles can be summarized as: expanding personal awareness; developing and implementing solutions; and sharing experiences.  Eichenberger also shared some thoughts on creating responsible donors, touching on the notion that philanthropy can help bring people together and give them a sense of purpose.

Wolfgang Hafenmayer also stressed the importance of individuals taking responsibility as he outlined the history and activities of LGT Venture Philanthropy, which developed as a result of one individual’s view that it is the responsibility of the wealthy to close the gap between the richest and the poorest around the globe. As well as introducing the Impact Ventures Global Fund and the current work to launch a similar fund in the UK, Hafenmayer spoke of LGT Venture Philanthropy’s ‘impact capitalists’ who use their skills to provide structured mentoring to global projects.

A clear focus on individual engagement emerged from the presentations, as SFG engage on a personal basis rather than simply with an employer, while LGT Venture Philanthropy aims to create a customized approach for each of their clients, as all of these have distinctly individual interests and aims.

During the discussion, it was questioned whether people tend to move from philanthropic donations towards impact investment and whether this indicates an evolution towards risk. It emerged that many believe that those who have accrued their wealth through social enterprise – and therefore understand this area and are more inclined to take risks generally – are more likely to consider making investments in this field. Again, this illustrates a potential difference between investors and donors: investors are more likely to look to data for impact measurement, whereas in a video from WISE Philanthropy Advisors, a member of a family foundation said the impact of a field visit on him is something that can’t be written in a report.

The role of donors vs investors was also a feature of the subsequent discussion. A question was raised about whether ‘responsible’ investors should be funding start-ups, or simply focus on organizations with a proven business model. Response to this included acknowledgement that many of those who start social enterprises may not possess all the requisite management skills to carry this forward and satisfy the demands of investors; therefore perhaps more investment in staff is needed to support organizations at this early stage. Conversely, while donors may fund charitable projects, they may be wary of funding start-up enterprises which aim to develop into businesses, as traditional grant-making organizations may not focus on the possibility of investing.

Whether looking at investment attitudes or suitability to be a mentor, the common theme in discussion was that each individual or organization has different needs and will approach things in a different way. The unifying factor is that clients, whether individual investor or institutional donor, wish to have a positive social impact in some way.

Relating back to SFG’s IPRI – which boil down to ‘I know, I apply, I share’ – it is the final part of this that seems most important: sharing. At a gathering of knowledgeable people who have all chosen to apply this wish to do good in one way or another, it was great to see so many people sharing their thoughts and experiences – thus demonstrating the worth of forums such as the Social Investor Breakfast Club.

Jenny Conrad is Communicaion & Circulation Officer at Alliance magazine.

Tagged in: Impact Impact investing Impact measurement social enterprise Social entrepreneurship Social investment Social Investor Breakfast Club Venture philanthropy


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