International philanthropy has consistently been on the leading edge of the movement to use market forces to stimulate sustainable social change. Organizations like the Grameen Bank and KIVA, for example, taught donors the power of providing access to capital to change the statistics of poverty for women and low-income entrepreneurs in far-flung communities, and paved the way for an explosion in micro-credit lending programs. Acumen pioneered the use of philanthropic capital to invest in innovative for-profit enterprises, with the promise of scaled solutions to tough social challenges. It is heartening to see these models, along with many others, are being emulated both domestically and abroad. More recently, interest in mission-related investing with a foundation’s corpus or a donor’s investment portfolio has also been on the rise. Yet as long as both donor and foundation leaders’ interest in impact investing far exceeds their actions, an enormous opportunity gap still exists.
To that end, Invest for Better is adding its unique voice in support of the important work done by leaders such as the Global Impact Investing Network (GIIN) and others who are changing how philanthropists not just think, but act on this front. Invest for Better is an open-source, non-profit initiative focused on helping women seize the power of their investment assets to become more effective change-makers and thereby accelerate and positively shape the mainstreaming of the impact investing ecosystem. We are pleased to collaborate with key founding partners such as Mission Investors Exchange, Mission Throttle, and the Case Foundation, as well a Steering Committee of field-building pioneers.
First, women continue to control more and more of global personal wealth. Estimates are that women control 40 per cent of global personal wealth today, with that number increasing annually. In the United States, women have already passed the halfway mark in monetary control.
Second, while the vast majority of women report high interest in and support of impact investing, too few are making the proactive decisions that support their values. In fact, too few are taking the time to participate in investment planning and decision-making at all, whether as an individual donor, as part of a family office or as a foundation investment committee member. The number of women on foundation investment committees is so low that benchmark data only reports on the percentage that have at least one woman on their investment committee.
Third, when women do invest, they deliver robust financial returns. Recent studies by Fidelity Charitable and Barclays have shown that individual women investors deliver stronger returns than men, and Bloomberg research suggests that investment committees with strong female membership deliver greater returns as well. Moreover, women who join governing boards and investment committees can deliver a shot of adrenalin to their networking and career arcs, for a mutual win-win.
Women face unique hurdles that may be social and cultural, such as ‘time poverty’ (as coined by Melinda Gates) driven by the multitude of demands on their time, or even personal, such as lack of confidence or interest in the investing process. But we believe that the keys to eliminating these hurdles come down simply to education, experience and connection. That is the gap that Invest for Better aims to close, with free resources, guides, and opportunities to connect to existing national investor networks or an emerging group of Invest for Better Circles which seamlessly encourage both first and subsequent action steps. The initiative profiles dozens of women who have discovered meaning and influence through impact investing, and invites all women and their allies to pledge to take some kind of action, ranging from the simple task of talking to their partner to starting an Invest for Better Circle, to moving their investments.
Even in the few short months since Invest for Better launched, we have come to more fully appreciate how inspiration, education, and activation of women around impact investing can deliver outsized returns for donors, investors and boards. Women participating in our pilot Invest for Better Circles are not only moving money that was passively and traditionally invested by the sole metric of financial returns into high impact enterprises and funds, but they are talking about the possibilities of impact investing with their financial advisors, friends, donor advised fund sponsors and foundation boards. And the ripple effect begins.
Women are stepping up to address global challenges through their purchases, their giving and their votes. We believe that as more women begin to explore and gain confidence in their investment capabilities, a re-energizing and re-awakening of their power to create and guide social change through impact investment will literally increase our communal capacity to change the world for the better.
Ellen Remmer is senior partner at the Philanthropic Intitiative