The Case Foundation's Steve and Jean Case, both of whom got millions of Americans online with AOL, also think impact investing has the potential to be a powerful tool for philanthropists. Jean points out that impact investing could be considered as one of the ways even traditional philanthropic organizations can strategically leverage some of their dollars toward social issues. "Impact investing will create a terrific opportunity for foundations and large organizations with large endowments," she says.
"I think we're kind of in the early days," says Steve, "but [impact investing] really is a place where things are trying to come together in a more integrated way and take some of the principles of business but also some of the principles of the social sector." He believes that this "blended model" will have a lot of appeal, "particularly for the up-and-coming philanthropists who don't want to just do it in a completely traditional way."
Jean and Steve Case on impact investing
Despite impact investing's potential, many in the philanthropic arena urge a cautionary approach. For example, echoing Steve's words about the "early days," a survey from JP Morgan Chase and the Global Impact Investing Network characterized the field of impact investing as “in its infancy and growing.” The survey also highlighted the lack of a track record of successful investments, a shortage of quality investment opportunities, and inadequate impact measurement practice. These potential challenges are significant, and may take decades to overcome. Due to the nature of these challenges, a report by the Monitor Institute and the Acumen Fund argues that impact investing is not a replacement for philanthropic contributions, but rather a complement, helping organizations to grow once they have proven the success of their model using, frequently, philanthropic contributions. In addition, despite the potential of impact investing, some who have studied the nascent field are worried that the approach could undermine support for philanthropy. Potential investors should realize that impact investing will require significant due diligence and attention to measuring results, and that however the field emerges, traditional philanthropic contributions will continue to be necessary.
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