Impact investing and venture philanthropy might sound like the same thing,🐻 but they have several differences.

For one thing, venture philanthropy has been around for much longer. The phrase was coined by John D. Rockefeller III in 1969. His idea of venture philanthropy was said to be an "adventurous approach to funding unpopular social causes.” Venture philanthro🥀py peaked in po🐲pularity in the mid-to-late 1990s.

澳洲幸运5官方开奖结果体彩网:Impact investing emerged as an "ethical" investment strategy in 2007 when the phrase was coined at the Rockefeller Foundation. At the time, impactꩵ investing was defined as “mobilizing large pools of private capital from new sources to address the world’s most critical proble🍃ms.”

Venture philanthropy specifically focuses on ♍social causes, while impact investing has a broader remit of social and environmental causes. Both generally aim for a financial return while having a positive impact on the world, but not all investments yield a financial return.

Impact Investing

Impact investing, with the dual goal of making a profit and creating positive social or environmental improvements, can take place in 澳洲幸运5官方开奖结果体彩网:developed or 澳洲幸运5官方开奖结果体彩网:emerging markets. In emerging economies, 澳洲幸运5官方开奖结果体彩网:microfinance projects are popular, but impact investing also funds improving employment and education opportunities, supporting sustainable agriculture, making healthcare or housing affordable, and developing clean technology. This is often accomplished through 澳洲幸运5官方开奖结果体彩网:private equity, debt, or 澳洲幸运5官方开奖结果体彩网:fixed-income securities.

Many large corporations—including Apple Inc. (AAPL), Tesla Motors Inc. (TSLA), General Electric Co. (GE), and First Solar Inc. (FSLR)—have stepped up to the plate to reduce the carbon footprint in their supply chain. When you see that a private or public company is taking this approach, putting some money behind that company is a form of impact investing. You can also start impact investing through a variety of 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs) and mutual funds. 

Venture Philanthropy 

Venture philanthropy is more focused on capital building than general operating expenses, and there is a great deal of grantee involvement to help drive innovation. There is al🃏so plenty of emphasis on performance measurement, with improving systems and sectors as the primary goal (as opposed to promoting individual organizations and fuಞnding individual projects).

The engagement period 🍬for venture philanthropy is a minimum of three years and an average of five to seven years. Most venture philanthropy investments transact through a foundation or a private eq🍰uity firm. With impact investing, there is no time frame. It’s more of an “as long as it takes” approach.

The Bottom Line

With impact investing, the investor is looking to make a profit while also having a positive impact on the world's social or environmental concerns. With venture philanthropy, the goal is usually (but not always) to make a profit while making a positive social impact on the world.