When it comes to impact investing, we need people willing to go out on a limb rather than re-erect business as usual.
Mara Bolis is a Senior Advisor on Market Systems at Oxfam America.
With his column, “How to Leave a Mark,” David Brooks at the end of last month brought impact investing to the mainstream. This may be the first time that the non-Stanford Social Impact Review reading population, i.e. 99.8% of Americans, have heard of impact investing. Good for Brooks for inviting retail investors and budding business school student, to use their portfolios – or even their careers – in ways that reach beyond pure self-interest.
Brooks points to many of the good things that impact investing has done. I applaud the fact that investment dollars are being used to address various social issues – autism early intervention, special education, access to eyeglasses. But being from Oxfam, I have to ask: Do these initiatives like these go far enough? Is it possible to leverage investment dollars to bring about broad-based social change? And if so, how?
Take, for example, Oxfam’s Women in Small Enterprise (WISE) Fund, which supports a portfolio of women to gain better access to growth capital. Based on their experiences with companies, Oxfam’s partner organizations develop recommendations for policy changes. The WISE Fund allows us to witness and document firsthand the huge obstacles women-run businesses face in building and growing their profits. These lessons are used by our partners to develop advocacy platforms rooted in the daily reality women business owners. We believe that investment funds like WISE chart a rights-based approach to support broad social change.
Without taking away from the importance of its work, it’s clear that a company that gives away free eyeglasses to people living in poverty does not sustainably address the market failure of insufficient health care access. What if every impact fund saw as their responsibility to use their experiences to draw broader attention to the social inequities that their interventions hope to (only partially) address? How much more could we do then?
Back to you, David Brooks. Thank you for starting this conversation. But now could I please have Thomas Friedman’s phone number? We need to galvanize those with resources who are more imaginative, willing to see possibilities where there don’t seem to be any, push the limits. To move the impact investing space forward, we will have to look beyond the mainstream to challenge the boundaries of what we’d previously imagined was possible.