Impact Investing – Using Private Funds for the Common Good
Impact investing is a rising trend, particularly in the UK and North America. The impact investing model doesn’t aim for maximum profit, but for social impact—achieving positive change. Check out this video for a quick overview (CC By G8 Task Force on Social Impact Investment):
Could It Work in Finland?
Could impact investing also help Finland deal with its economic problems? The government’s treasury is running out, and politicians are feverishly looking for ways to secure welfare services with ever fewer resources. The public sector cannot manage alone.
At the same time, Finland has many small companies well poised to achieve social change. However, these companies have trouble finding suitable sources of financing to develop their operations. Private capital and expertise is needed.
Where to Begin?
Experiences and lessons learned the hard way around the world with respect to impact investing are available to anyone wanting to get started. Just last week, we organised a seminar the gathered public, private and third sector people under the same roof.
In addition to Finnish experts, one of our speakers was Caroline Mason, chief executive of the Esmée Fair-bairn Foundation, one of the UK’s leading social investors. She talked to our enthusiastic audience about the key considerations that need to be taken into account in impact investing:
- Focus resources to achieve change and keep operating models simple. The change being sought is the most important driver.
- Verify and communicate impacts.
- Develop a deep understanding of the impact area in which you want change to happen and the risks that are associated with it. Impact investing is not for impatient investors: the time scale could be years.
- Stay close to and work with the investment target.
- Encourage interaction and follow changes as they occur.
Profitable Investments in Change
Impact investing offers a promising channel for social change. We are certain that the debate about the subject is due to expand and deepen and lead to new and innovative solutions in Finland.