What is impact investment and low-cost community benefit foundation capital?

Impact investment is the financing or capital injection into companies or projects with the intent to generate environmental and social returns in addition to financial gains.  Often philanthropic foundations, high net worth individuals (HNWIs), family offices, or impact investment funds will fill the role of financier and tie their expectation for financial return with metrics that track and report community benefit, environmental, or social performance metrics. Community solar programs are most likely to look for financing from philanthropic, private equity, or family office funding as opposed to pension or retirement plan sources, which typically invest in the equities, or bond markets.

Impact investment methodologies are diverse, and often change based on the goals of the investor. As such, the term impact investment can also refer to filter-based investment strategies designed to screen investments based on corporate track records for environmental compliance, ethical supply chains, or other factors designed to divest a portfolio from activities deemed as unsavory to the individual investor.  Environmental social justices, gender, climate, and corporate social responsibility screens have informed investment portfolios and resulted divestments from brands, corporations and publicly traded equities in the pension funds universities, municipalities, and in the portfolios of family offices, and HNWIs.

Karina Zafiro