Impact Investing: “How Much Better Would It Have to Be?”

I got a great ‘question’ idea from an inc. article today:
“How much better does our “better” have to be for you to work with us?” was number 3 of the article’s 5 questions for assessing prospective customers.

Let’s apply this to Impact Investing:
“How much better than a traditional investment would our system have to be, to persuade you to invest in us?”

My hunch?

It would have to be:
– easy to find and easy to use
– fun to be part of
– risk-free
– credible: independently monitored, tied to established criteria eg FTSE4Good, UN Principles for Responsible Investment, GIIRS or IRIS
– giving a reasonable return: above the average high street bank saver account rate, preferably guaranteed even if over a short time (eg 3-12 months) … or offering people a risk choice of ‘fixed’ or ‘surprise me’
– clear impact benefits eg. like HungerSite ‘you just gave a cup of food to a hungry child!’ … what’s not to love about that?
– giving people a feeling of having a whirl on the stock exchange, whilst also getting that warm glow inside they’d get from giving to charity … and of course they can reinvest again and again
– like a game – a bit addictive, you can win mini-competitions, earn points … a reason to come back frequently – Empire Avenue meets Kiva
– successful! nothing succeeds like success.

Any other “better” criteria you can think of?

What would persuade YOU to invest a % of your hard-earned into such a fund?

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3 Responses to Impact Investing: “How Much Better Would It Have to Be?”

  1. Here’s the inc. article I quoted:

    http://www.inc.com/tom-searcy/the-five-crucial-sales-questions-youre-afraid-to-ask.html

    I recommend inc. … the articles are always short, pithy and full of new ideas.

  2. Nina Killen says:

    This is interesting because we have just started investing in a stocks and shares ISA for the children and I feel I need to tell our IFA that I want to invest in ethical shares only. I am not too bothered about making mega interest – I’d like to make at least inflation plus a bit more (compound interest in itself is enough to grow a pot). Shares scare the shit out of me at the moment because of volatility in the market and I wonder if the stock market will ever again be the money spinner it once was – it might not be, quite likely will not be. We can afford to take a chance with the cash although obviously we’d prefer not to lose it all! But surely you couldn’t guarantee a return of more than what the banks are offering could you? if you did I think you’d have a few takers! But investment is about taking some risk, no?

  3. Hi Nina

    I just took out an S&S ISA through Coop bank. My first, I’m usually such a bear I always stick to Cash ISA (which I just moved to Triodos to up its impact). Coop offer a whole range of ethical ISAs, far more than they recently did, which is good news. You can choose your level of ‘risk’.

    I know very little about banking. Just suspect that there might be a middle ground solution between savings interest at 0.squat percent and credit card rates at 16% and up… Same for businesses. Very little return on savings, massive costs for loans.

    Anyway it’s just an idea so far but it’s quite a big global market for ‘high net wealth’ families, institutional investors and businesses (US$25 trillion in fact).

    I wouldn;t have bothered to start abusiness if I wasn’t getting at least 25% return on my investment (what value are you creating then?) so to manage 8% or so return to investors doesn’t seem out of the ball park. I need to crunch some figures on that.

    Anyway good luck finding your ISA – are you going for a Junior ISA? I decided that based on my own experience of turning 18, getting my hands on a pot of cash on that particular birthday would not have been a brilliant idea!

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