Impact Investing means
intentionally placing capital to achieve a measurable social/environmental and spiritual gain alongside financial return
All enterprises, regardless of tax status, can produce both social and financial results on a spectrum from positive to negative. Therefore, these investments can be in nonprofits, private companies, venture funds, or private equity funds, and may be structured as debt, equity, or a blend of the two.
Each of the components of this definition deserves attention. First, the idea that we are intentionally placing capital means that Kingdom Impact Investing goes beyond negative screens. This includes biblically or socially responsible investing, where one avoids placing money in “sin stocks” like gambling or in companies that are known environmental polluters. Next, measurement needs to play a key role in assessing impact. When it does, we will better understand whether individual investments, as well as the Kingdom Impact Investing marketplace overall, lives up to expectations. Finally, financial return must be present in an investment portfolio, although individual performance may vary for a portion of capital returned to risk-adjusted market rate returns, as the chart below explains.