In years past, many people believed that the government and charities were responsible for tackling social issues while businesses concentrated on profits. Impact investing brings the three worlds — public, private and nonprofit — together to solve social problems. In 2007, the Rockefeller Foundation used the word “impact” to describe investments that yield both financial and social gains. Acumen, for example, is a nonprofit organization and a key player in impact investing. Other well-known corporations that engage in impact investing include Citigroup, Inc. (NYSE: C) and JP Morgan Chase & Co. (NYSE: JPM). Both entities fund development projects in underserved communities worldwide. If your beliefs are in line with a company's philanthropic vision and you have a background in business and finance, the following career specialties in impact investing may be a good fit for you.
Business Development for Nonprofit Funds
Nonprofit funds, such as Acumen, partner with organizations that focus on addressing social issues in Asia, Africa and South America. As with any other enterprise, Acumen's business development team is responsible for establishing relationships that bring money and opportunities to the fund. Some business development professionals specialize in working with investors while others work with entrepreneurs and enterprises in developing countries who are looking for capital. For example, some members of Acumen's business development team are based in New York City and focus on building relationships with donors. Other business developers based in Africa and Asia work with entrepreneurs and other stakeholders in those regions, such as universities, nonprofits on the ground and banks, to fund projects.
Fund Manager for an Asset Management Company
A career in impact investment could involve working for a company such as BlackRock, Inc. (NYSE: BLK), an asset management company with more than 13,000 employees worldwide. BlackRock says that it is experiencing a growing trend towards impact investment. In 2014, the company reported growth of sustainable assets in its portfolio at 33% for the United States and 26% for Europe. Career pathways at BlackRock vary depending on your skills and interests. For example, research teams focus on investment analysis, and investment teams create investment strategies for clients. Sales and marketing teams communicate with potential clients about impact investment opportunities, sell investment products and promote the company brand. Client support teams advise investors, including pension fund managers and government agencies.
Top financial advisors at investment companies such as Merrill Lynch, a wealth management division of Bank of America Corporation (NYSE: BAC), report that awareness among millennials about sustainable investments is growing. This interest in impact investments is opening up dialogues between millennials and their parents about retirement fund choices. As a financial advisor specializing in impact investing, your goal would be to educate clients about impact investing and how such investments can help them make gains. For example, using an impact investing model, families and individuals have the option of allocating percentages of their investment incomes to different goals. Some goals for an impact investment portfolio include sustainable food sources, solar power in rural areas and fair business practices. Families and individuals may have an interest in allocating all or just portions of their retirement incomes to sustainable enterprises.
Teaching impact investing offers the flexibility to move between the corporate world and academia. Colleges and universities provide an opportunity to share your professional knowledge about impact investing with the next generation of business leaders in a learning environment. Initially, most classes focused on impact investing were offered at the graduate level. In recent years, however, impact investing courses offered by business schools are also making their way into undergraduate business curricula. For example, freshman business students at Northeastern University worked on projects where they used tools to analyze the impact and efficiency of various enterprises. They also learned ways to determine whether a business could attain sustainable growth without compromising its social mission.