The Impact field
Definition 1:
What are you striving for?
The Impact ABC
Financial-only
Responsible
Sustainable
Impact
A. Organisations may try to cause no harm to people and the natural environment and act to avoid and/or reduce harm: by identifying where the organisation is causing harm to people’s well-being and the condition of the natural environment and improving those outcomes so that they are getting nearer the sustainable range established by the societal or ecological threshold. This objective is set when the organisation will improve performance on the outcome, but will not achieve a sustainable outcome within the period for which the objective is being set.
B. Organisations may further aim to be ‘sustainable‘ by benefitting stakeholders and/or the environment: by not only Acting to reduce harm for all stakeholders, but also maintaining or causing improved well-being for one or more groups of people and/or the condition of the natural environment, so that it is within the sustainable range established by the societal or ecological threshold.
C. Some organisations will research a social or environmental challenge and design a business model to contribute to solutions: by not only Acting to reduce harm for all stakeholders, but also improving the well-being of a group of people or the condition of the natural environment so that the outcome is within the sustainable range, where the outcome had been unsustainable prior to engaging with the organisation through no fault of the organisation itself. These unsustainable outcomes might have been the result of market or policy failure, leaving a group of people without access to something they need for their well-being or putting the availability of natural resources at risk.
Definition 2: What is your financial interest?
Barby C.1 and Pedersen M.2,3 (2014) ALLOCATING FOR IMPACT, Subject Paper of the Asset Allocation Working Group, SOCIAL IMPACT INVESTMENT TASKFORCE established under the UK’s presidency of the G8, September 2014, retrieved 26.10.2019 from https://www.bridgesfundmanagement.com/wp-content/uploads/2017/08/Allocating-for-Impact-Subject-Paper-of-the-Asset-Allocation-Working-Group.pdf, author affiliations: 1 Bridges IMPACT+, 2 UBS, 3 miscellaneous Working group members
Definition 3: A purist definition
Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return in a range from below market to market rates".
Definition 4: Invest-In-Impact´s Understanding
We love the idea of pure impact generation and impact investment. We would love that all companies would suddenly strive to achieve pure impacts and the purest definition. However, we acknowledge that for a lot of companies change is a process. On the Invest-In-Impact plattform we want to allow also companies and organisations with ESG, responsible and sustainable goals of "Do no harm" and "Benefitting Stakeholders" as well as organisations that might not generate financial returns who want to change their current business models to find investors with similar interests. At the same time we are striving to make the individual goals clear on our site in order to achieve the highest transparency as possible thus avoiding social and green washing as well as overpromising of financial returns of activities and investments.
What is also important to us is that each level of goal achievement include the "lower" level goals. In order to be classified as an organization that contributes to "impact solutions" the goals of "Do no harm" and "Benefitting Stakeholders" need to be achieved as well.
Who is in the Impact Arena?
Definition
The impact investment field ranges from sustainable investments with market rate returns to philanthropic investments with low negative returns. The different subsets of investment focus above are not fully distinguishable and demand side and supply-side actors (below) are active beyond different sub-markets of the impact investment focus. Typical investment field stakeholders are shown below. Between the sources of capital and purchasers intermediaries on both sides use different forms of finance to interact.
SIIT (2014), Impact investment: The invisible heart of markets – harnessing the power of entrepreneurship, innovation and capital for public good, report of the SOCIAL IMPACT INVESTMENT TASKFORCE established under the UK’s presidency of the G8, September 2014, retrieved 26.10.2019 from http://www.ebanimpact.org/report-of-the-social-impact-investment-taskforce-g8-2/
Impact/Social Driven Organisation
Impact and socially driven organization and generators of impact
If this sounds like that Impact Generation is what you and your organization are doing check out what Invest-In-Impact can do for you.
The definition of Impact enterprise adapted from Jones (1) is “any legal organization that is created for the purpose of alleviating a social challenge, with a revenue stream, but not bound by structure or sector.” From the GIIN platform`s general definition of impact investments “Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” Hence, impact enterprises must be companies who are providing goods or services with the intention to generate positive, measurable social impact alongside a financial return. Often impact investment is associated with improving lives in the developing and or emerging countries with a focus on, for example, the SDGs or focusing on urban poor in developed world. In our understanding though, many companies provide services that adress societal challenges and thus create a social or environmental benefit besides a profit whereever they and their customers and beneficiaries are located.
If you are an impact and/or social entrepreneur or you represent or work in such an organization and want to know more about the benefits of this website for you, then follow here to the impact generator page.
(1) Jones J. (2019), “The Demand Side of Impact Investing: Elevating the Perspectives of Local Entrepreneurs in the Impact Sector,” Oxfam Research Backgrounder series (2019): https://www.oxfamamerica.org/explore/research-publications/demand-side-impact-investing
Impact Investor
Source of Impact Capital
If this sounds like what you and your organization is doing check out what Invest-In-Impact can do for you.
Impact Investors act on the Supply Side of Impact Investment. They provide funding to intermediaries ("channels of impact capital") or directly to Impact Generators. Depending on their investment focus they make investments into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return in a range from below market to market rates.
Here on the site we also welcome you if you want to support organizations and companies to achieve their goals of "do no harm" and "benefiting stakeholders" which by some standards might be considered CSR and ESG investments.
If you are an investor or represent an impact capital and want to know more about the benefits of this website for you, follow here to the investor page.
Impact Intermediary
Channel and/or Management of Impact Capital and Impacts
If this sounds like what you and your organization is doing check out what Invest-In-Impact can do for you.
In between the source of capital and the Impact Generator (entrepreneurs/organization) very often entities are managing the channeling of capital to one side and the measurable impacts to the other. In general terms you might call yourself or represent an asset manager who is managing impact funds of high net worth individuals, family offices and others. Maybe you are part of a promotional or social bank or any other social and sustainable driven finance institution.​
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At Invest-In-Impact we conisder you as an Intermediary if you plan to provide funds directly to an Impact Generator or are planning to be the lead investor of a group of multiple investors.
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If you represent such an organization and want to know more about the benefits of this website for you, then follow here to the intermediaries page.
Outcome Experiencing Purchaser/
Beneficiary
End Consumer/Beneficiary using the product or service and experiencing the outcome
At the end of the cycle (or if you will at its beginning) of the value chain is the impact consumer. He or she is looking for and buying products and services that impact people´s lifes positively while desiring that their production and delivery does not hurt other people and the environment.
Here at Invest-In-Impact we consider as consumers really the people, organisations and entities that buy impactful products and services since through them they improve their lives or the lives of other people.
We consider that governments and foundations who commmission outcomes do this on our platform as Investors or Intermediaries and can be sources of capital as well as purchasers of impact.
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