The popular practice of making New Year’s resolutions has never appealed to me. Maybe it’s because for me the exercise feels empty and arbitrary. Or perhaps because it’s so rarely effective: last year a New Year-timed article on Forbes opened with the unsurprising declaration, “Studies have shown that less than 25% of people actually stay committed to their resolutions after just 30 days, and only 8% accomplish them.” The article went on to recommend setting goals instead of making resolutions. But whether resolutions or goals, why wait until January 1st 2020 to decide what you want to celebrate come January 2021?
As this year approaches its conclusion, why not identify those things you want to celebrate at the year-end holidays, and set those things in motion today?
Specifically as an impact investor, why not make at least one new capital commitment — maybe even take the leap and make your first ever impact investment — before you find yourself facing another January?
Why now?
I’m tempted to go full-on Cyrano de Bergerac and throw down a barrage of answers to that question, but since I doubt I can match either Edmond Rostand or Steve Martin for cleverness, let’s stick to three.
Pragmatic. With just over 100 days left in the year, it’s a psychologically resonant timescale to set and achieve concrete objectives [a simple web search on “100 days” turns up a multicultural profusion of books, films, historical discussions, fitness and other goal-directed programs, baby traditions, school year milestones, and lots more]. Moreover, accomplishing meaningful new milestones before year-end will position you to finish the year on a high note, whether you are measuring the year’s accomplishments for yourself, your organization, or your clients. If you take advantage of this homestretch of the calendar year to prioritize new impact investments, you should have just enough time to select, diligence, approve, and execute before the year-end holidays.
Opportunistic. Imagine the difference it will make to your new year to start Q1 2020 with at least one impact investing goal already accomplished. While others are winding down 2019 with a backward-looking fourth quarter, you can seize the moment and use your Q4 to leap ahead. As a result, rather than beginning 2020 from a standing start, you’ll have the momentum of fresh progress and newly gained insights to propel you forward.
Euphoric. Picture yourself at the year-end holidays, exuberant and freshly buoyed by your new accomplishment. When so many people are afflicted with year-end burnout, you can dodge [or at least mitigate] seasonal enervation and instead prepare yourself to end the year exhilarated and in high spirits. It’s true that completing a new impact investment before the year is out will entail a significant effort that perhaps you hadn’t already planned to make. But the satisfaction of completing a new capital commitment that satisfies multiple concrete objectives and aligns with your personal, organizational, and/or client values promises to deliver a powerful psychological and emotional boost — especially if it’s the gratification of accomplishment that comes with making your first ever impact investment or the first in a new category.
So many to choose from
Whatever your impact interests might be, and whatever order of magnitude of capital you have to deploy, there are abundant impact investing opportunities available. Contrary to the misinformed but widely voiced complaint, “there are no good products,” there are increasingly numerous high quality public market and private market investment instruments, and they are readily available across geographies, asset classes, sectors, timescales, and themes.
We have spotlighted several examples in previous blog posts, and groups like TBLI, Mission Investors Exchange, Intentional Endowments Network, TONIIC, Social Venture Circle, Confluence Philanthropy, The Billion Dollar Fund for Women, and others provide peer-to-peer intelligence sharing and access to managers, funds, bonds, and companies worthy of investment.
Moreover, numerous practices exist that are already experienced in various impact investing disciplines, and which provide guidance and products to clients / members seeking multiple-bottom-line objectives. These include Trillium Asset Management, Boston Common Asset Management, Robasciotti & Philipson, Pique Ventures, Peak Change, Impact Assets, Next Wave Impact, Cornerstone Capital, Zevin Asset Management, Veris Wealth Partners, and many more.
“We can no longer define success as just greater profits. That’s obviously important (no margin, no mission) but true success leads to a stronger and healthier community and environment as well.” — Jay Coen Gilbert
Let’s be unequivocally clear: you are not making an either/or choice between financial returns and larger social and/or environmental benefits.
Sometimes there is a valid case to be made for accepting reduced returns in exchange for other benefits — just as in conventional investments, where bonds play a valuable role in many portfolios despite generating lower returns than other instruments. But there is no a priori tradeoff pitting either financial return or risk against intentional positive social or environmental impact. [see, for example, this latest report from Cornerstone Capital, and this article from Winthrop Rockefeller Foundation on SSIR.] In point of fact, mounting evidence shows the exact opposite: disciplined, intentional, informed impact investments often significantly outperform conventional investments.
Also let’s acknowledge that conventional investments are not necessarily positive or even neutral: again, mounting evidence shows that conventional investment practices frequently carry unintended and overlooked but material negative impacts. [see, for example, recent reports from Confluence Philanthropy, Impact Alpha, Illumen Capital and Stanford SPARQ, among others.] Continuing to practice those purportedly prudent or proven conventional investment practices is more than likely causing you to inadvertently incur a noxious mix of increased risk, suboptimal returns, and negative social and/or environmental impacts.
So whether you are an experienced impact investor or aspiring to make your first impact investment, it is entirely in your own enlightened self-interest to act now. Don’t wait. Make one or more new impact investments in the next few months that will carry you into the new year with ample cause to celebrate!
What are we planning to celebrate?
For our part, Reinventure Capital is working toward a first close on our social impact fund before the year is out. We are thrilled by the commitments we have received from a wide variety of individual, family office, and institutional investors, and we are actively gathering new commitments as the autumn unfolds.
We are keen to start 2020 at a run, investing in some of the many exciting companies we are actively tracking. These are US-based expansion stage (breakeven or so) companies led by people of color and/or women, poised to become the economic engines that will positively transform sectors, societies, markets, and lives — and generate non-concessionary returns to investors.*
We have lots of intense effort ahead to be able to celebrate achievement of our year-end goal, but we are freshly invigorated every day by both the amazing founders we meet and the incredible peers and LPs we are fortunate to work with.
If you’re looking for ways to raise your social impact expectations and level up your investing practices so you’ll have cause to celebrate, please contact us!
And if you are already actively investing with a social impact strategy, please share, so others can join you and have cause to celebrate, too!
Photo credit: Apichart S / FreeImages
*While there’s no such thing as a guarantee in investing and no one can reliably predict the future, Ed’s prior track record delivering 32%IRR to investors provides direct evidence that it is indeed possible to consistently invest for both financial returns and social value creation. If you are an accredited investor and would like to learn more about investments that can advance social, racial, and gender equity by supporting high-value companies led by women and/or people of color, please contact us to start that conversation.
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