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Working Hope: Sizing Demand at $120 Billion

Rishi Malhotra August 25, 2010

This post was written by Kevin Jones, Co-Founder of SOCAP10 and Founder of Good Capital.
What’s the real investor demand for putting money to work in impact investing? How many dollars are out there, and what is this new breed of investor, willing to link meaning and financial return, really looking for? What sells and what doesn’t?
Those are just some of the questions that are beginning to be answered thanks to new research funded by leading foundations carried out by Hope Consulting. The good news is the market is big, estimated to be at least $120 billion in the U.S. alone.
According to the report, most of these investors don’t care much about the size of the financial return that’s offered as long as they get their capital back.
As someone who has sold a fund to impact investors, their conclusions make sense to me. The way I interpret their data through my experience, leads me to this conclusion: I do not think impact investors pull the trigger using asset class thinking, measuring fixed income to public stocks to private equity with a complicated, if aspirational spectrum of risk and return. That’s the way you manage your traditional investments. That’s not how people take action on impact investing.
As people mull over the decision, I interpret the data to say  that impact investing acts more like giving; I want this to happen. People say, I want my money back to do it again, most of the time. Don’t get in the way of what I am getting with your complicated portfolio-defining distractions.
They also found a segment willing to take more risk to make more catalytic things happen, but that was a smaller group.
While a milestone in itself, the Money For Good Report, thanks to emerging market dynamics, represents data that will become more valuable over time, as the market emerges, and supply intermediaries like the impact 50 arise to help clarify the Money for Good Report’s original and crucial sizing of demand that’s been accomplished in this report.

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