What does the growth of impact investing mean for your career?

Photo credit: Nonwarit, Shutterstock

Photo credit: Nonwarit, Shutterstock

Before we dig into career tips, here’s a little primer on impact investing: Impact investments are made to generate positive, measurable social or environmental return alongside financial returns. Instead of a traditional funding model where donors only look at social return or a traditional investing model where the focus is on financial returns, impact investing combines the two, aiming for social and financial return.

For example, the RSF Social Finance Fund according to their website,“provides a unique opportunity to invest in a diversified, direct loan fund comprised of over 80 leading non-profit organizations and for-profit social enterprises.” It delivers returns similar to a Bank CS while providing funds to diverse organizations like Green America , Blab and gDiapers.

The industry is exploding. When I was at last month’s SOCAP – social capital markets –  conference the sentiment was that the field has graduated out of the first stage of growth and is beginning to go mainstream. There are estimates that impact investments could be at $1 Trillion by the end of the decade.

At that scale, it’s likely to play a role in your career whether you’re involved in the field yet or not. Here are three reasons why:

You’ll need to quantitatively demonstrate your impact

Investors looking for a financial and social return need a solid way to measure results. The dollars are a straightforward measure; the social return is not. The more clarity and transparency you and your organization bring to your measurement process, the easier it will be for investments to flow to you.

Of course, there are difficulties in comparing social returns across sectors and methods, many of which we explored at SOCAP.  And while many of us are encouraged to be data-driven in our work, we still struggle with selecting the right measurements and methods. Indeed, right now, asthis report from Impact Economy points out, the industry still does not have agreed upon standards for social impact measurement.

What does this mean for you?

Even if you are working to ensure that you have measurable data to demonstrate that you are making a difference, expect to see more emphasis on standardization within and across organizations.

This climate means increasingly, impact measurement skills are not just required of Program Managers or Executive Directors. No matter what your role is, you’ll need to understand data quality, data management, measurement and data challenges to get a competitive edge. For those who lead, this climate presents an opportunity for you to prove your organization’s impact and shape the accountability standards for the future.

You’ll need to have a greater understanding of other sectors

No longer will organizations only be compared against others in their industry or region; it’s becoming more and more possible to compare impact across different domains and even sectors. The pressure for these types of comparisons will increase as impact investing grows.

For example, in the RSF Social Fund cited earlier, the B-corp gDiapers, which makes reusable diaper covers, was listed as part of the same portfolio as the 501(c)(3) organization Recycle Force, which offers recycling services while training formerly incarcerated individuals. Though seemingly disparate, they likely competed against many other organizations working in in similar fields looking to receive funding.

What does this mean for you?

You need to have an expanded understanding of who is working on the issues you care about, whether they are non-profit, for-profit or a hybrid type organization and whether they are in your region or not. This might mean more competition or more opportunities for collaboration, but as boundaries become more fluid, it’s key to understand the business model of the organization you are working within and how they are best suited to solve a particular problem.

You’ll find new opportunities for work and new ways to work

Impact investing is a relatively young and rapidly growing industry. This spells opportunity; as social investment gains momentum, there are job opportunities to work directly in the field and be a part of the new economy.

What does this mean for you?

It’s a great time to learn about the tremendous number of networks and accelerators working to grow the field of social impact investing.

How do you see impact investing relating to your career? Share your thoughts in the comments.

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About Author

Cynthia Jaggi is an entrepreneur and leadership expert for people who are looking to create massive impact. Through her writing and courses, she's here to shake up your approach to creating your most meaningful life and work - while making it all feel like fun. She was named a lean-startup ambassador for her work bringing a lean approach to social impact and her insights have been featured on Business Insider, Women 2.0 and Idealist Careers. Her passion is to shift the economy to a regenerative model that puts people and the planet in the center. To achieve this goal she works to build + grow social impact businesses and to empower professionals to create their most meaningful life and work. She is the Founder of GatherWell, the Think + Do tank for Practical Idealists and a Partner at Living Economy Advisors, increasing the flow of capital to the living economy. A bit of her fun? dancing, gardening and the occasional dip under a desert waterfall. Meet Cynthia and get ready to create a more meaningful career & life at cynthiajaggi.com

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