Impact investing—also known as values-based or socially responsible investing—is a growing movement among those seeking to align financial goals with social and environmental concerns.
Shaw Society member Nick Tiller ’96, a former fund manager turned venture philanthropist, shares advice for BC alumni, parents, and friends who want to make a difference with their investment dollars.
1. Do Your Research
Start by reading up on impact investing, talk with your friends and financial advisors, and see how it can fit into your family’s plans. It’s not as daunting as it sounds, and there are many good resources online. For an unbiased starting point, visit www.investwithvalues.com.
2. Start Small
Impact investing doesn’t have to be complicated. Pick an issue you care deeply about—perhaps community development, education, or the environment—and make an initial investment that supports your values but doesn’t risk your retirement. Learn from your results and build on your successes for an even greater impact.
3. Know Your Goals
It’s not necessary to accept lower returns as an impact investor, though sometimes people choose to do so. It all comes down to what your personal goals are, both for your financial planning and for your social, philanthropic efforts. If you do choose to make a concessionary return (below market rate), just know that there are higher return options out there. It’s OK to make that choice. Just do it consciously.
4. Pick the Right Mix
Impact investing covers a wide range of options, from microloans and crowdfunding to mutual funds and venture capital. Some investments, like green bonds, help corporations raise capital to fund sustainability projects and yield exactly the same as other similar quality bonds. Other investments, like community-based lending, might offer lower financial returns but higher social returns. Beauty is in the eye of the investor.
5. Just Do It
Investment capital is one of the most powerful forces for positive change in our world. Government and nonprofit agencies often move slowly, but capital moves quickly, and every successful business improves lives in some way. Given the variety of options available today, anyone can be an impact investor.
Nick Tiller ’96 is the founder and chairman of Sustainable America, a nonprofit dedicated to making the nation’s food and energy systems more sustainable through education and impact investing.