Invest for Impact: An Exploration of the Incongruities in Social Finance

Within the impact investing industry, a definition for societal return and how to measure this concept is lacking. Although its potential has been proven, there is still very limited exposure to impact investing within the United States. The present study aims to survey the current status of the impact investment industry in the United States, assess the presence of gaps between investments and their outcomes, and formulate a framework for addressing such shortcomings. The current status of the impact investing industry was examined and evaluated in order to understand how the industry is defined, what is the outcomes social finance, and how these outcomes are measured. This survey led to the identification of 56 impact investment organizations. Each of these organizations was analyzed to determine key characteristics that can be used to establish a typology of social investment options. These characteristics include the primary funding source, level of returns, time frame for returns, legal structure, and investment foci. Following an in-depth analysis of the organizations in this sample, the benefits and costs of each impact investment model were evaluated. An overall framework that combines aspects of several of the studied models is referred to as the ‘Central Fund.’ The ‘Central Fund’ was created to address some of the gaps in the market and to provide a conceptual framework for a theoretical impact-investing fund. A provisional business model was developed based on the Central Fund, which includes several innovative revenue-providing facets, such as a potential hummus truck venture and benefit concerts. This model highlights the need for additional exposure to social finance options for the every-day investor and an exploration of potential co-existing revenue streams within an impact- investing model. Overall, findings from the present study suggest that innovation is necessary to promote further growth of the impact investment industry