As a result, the students can complete their degrees less expensively, and the college partners receive students that have already demonstrated success with college-level work, increasing their likelihood to graduate. These students can take introductory courses inexpensively with the company, then transfer those credits to the traditional college partners to complete their degree. To achieve this, these colleges partner with this company by sending it a portion of their potential enrollees. Traditional colleges face pressure to ensure more students graduate and do so with less debt. It is the opposite of a concessionary strategy.Īn example of integrated impact investing is a company whose mission is to provide the freshman year of college for $1,000. We call this integrated impact investing. These “integrated models” that we pursue are IT and data driven, contributing to higher margins and superior value creation compared to peers. We believe the best way to find these opportunities is to focus on business models that integrate financial and social outcomes, allowing impact and return to grow in concert and reinforce one another. Throughout our economy, there are compelling opportunities to outperform the market through non-concessionary investments. This non-concessionary flavor of impact investing demands achieving social impact goals without conceding return. This approach to investing can be the right tool for certain mission-oriented dollars, but it is important to distinguish it from a (non-concessionary) approach to impact investing that attempts to transform traditional approaches to wealth management. The lion’s share of this misuse stems from lumping concessionary and non-concessionary approaches to impact investing together and, worse, dressing up concessionary investments as non-concessionary ones through either abuse of language or simply naive investing.Ĭoncessionary impact investing pursues opportunities that drive social change through businesses that pursue a financial return, but not necessarily one at or above market rates. Impact investing is a commonly used and misused term. A sound understanding of non-concessionary impact investing will allay fiduciary reservations and unleash this restrained talent. Key to this frustration is the confusion around non-concessionary impact investing. Today, these people are frustrated by an approach to family wealth management that does not believe linking values with financial outcomes can improve returns. Specifically, my focus is on those individuals who are either part of a wealthy family or who work for family wealth management and believe that linking family values more explicitly with financial outcomes can be both good for financial returns and good business. I often write about talent wasted in the essential worker economy, but today I am writing about other wasted talent.
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