All Posts Tagged: GIIN

Impact investing & collaborative philanthropy: 2 top approaches

Julie Davitz
Posted by Julie Davitz
Strategic Philanthropy

What’s the best way for philanthropists to create sustainable outcomes with their giving? According to the 2016 BNP Paribas Individual Philanthropy Index, the two most popular answers are impact investing and collaborative philanthropy.

Young adults lined up on a beach with hands joined above their heads.Let’s look more closely at each.

Impact investing

The phrase “impact investing” refers to investments in which there is a defined and measurable financial and social outcome and achieving social good is at least as important as financial returns. The social good, for example, may range from alleviating poverty to helping solve an environmental problem.

I’m seeing more and more people who are willing to leverage their philanthropic goals with their financial portfolio. In fact, these sorts of investments were estimated to reach $60 billion in invested capital in 2015, according to the Global Impact Investing Network (GIIN).

The BNP Paribas report cited a few factors in the rise of impact investing, including millennials’ preferences for socially responsible investing. The financial collapse in 2008 also played a role, showing how elusive profits can sometimes be; but, as the report noted, impact investments may bring a “built-in guarantee of social good.”

For more on impact investing, see Steve Prostano’s blog post about recent research among Bay Area philanthropists.

Collaborative philanthropy

Philanthropists around the globe said that collaboration – as opposed to going solo — is the surest way to achieve a sustainable outcome, the BNP Paribas report found. The two top forms of collaboration were with other philanthropic organizations and other individual philanthropists.

Is it a demonstration of the adage that there’s strength in numbers? Perhaps. But I think collaboration also may foster more experimentation and innovation, as 56% of the surveyed philanthropists said they were willing to go outside their comfort zone in this area.

Collaboration can also happen through consulting with trusted relatives, colleagues or leaders in one’s field of interest, or with philanthropy advisors. In fact, 57% of those surveyed said that advisors were most helpful in offering guidance to help achieve sustainable outcomes.

I look forward to seeing how these two major approaches grow and develop, and I expect we’ll see more exciting results as philanthropists continue to implement them. To read more about the BNP Paribas Individual Philanthropy Index, you can download the full report here or view this summary.

To learn more about wealth management or philanthropic advisory services at Bank of the West, visit our site.

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Bay Area’s impact investing sheds light on larger industry

Steve Prostano
Family Wealth Advisors
View along the shore at waterline, with Golden Gate Bridge in the distance.

I think insights from a report on impact investing in the Bay Area have a broader relevance worth highlighting.

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