Things have not been looking too optimistic in 2020. There are many ongoing issues (such as climate change, the black lives matter movement, the famine in Yemen, and the coronavirus outbreak, just to name a few) which have led people to feel hopeless about the future. It’s difficult to know how to help in these circumstances.
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Whilst giving donations to charity is a good start, we think there is an even better way to help tackle these issues: through impact investing and philanthropic ventures. For those who are sceptical, or unsure about the benefit becoming an investor to aid charitable causes will bring, we’ve written this article to change your mind. Read on to find out how you can make money and have a positive impact on the world.
Funding the Future
The right investments help to fund the industries which will have the most positive impact on the future. For instance, the medical industry is currently developing treatments like the coronavirus vaccine, to save the lives of high-risk individuals everywhere. Meanwhile, the tech industry is working on bionic limbs, so that amputees can effectively restore their motor function and independence. Your investments can power the companies working on these things, allowing them to access all the resources they need and keep them from going bust.
If you are still not convinced, there are many incredible examples that demonstrate the many benefits impact investing can bring. For example, investor Tej Kohli founded the Tej Kohli Foundation to help artificial intelligence companies which create bionic limbs, while Ross Piper is pouring capital into fighting climate change.
Not only do these prosperous industries provide you with a high return on investment, but they are also key to solving the biggest issues we face in the world. What’s more, your capital goes straight to the root of the problem, which isn’t necessarily the case when donating to charities (a significant amount of patrons’ money goes to marketing the cause as opposed to tackling real issues).
Powering the Economy
Investing directs your capital directly into the cause. Not only does this stand you in good stead for receiving a worthy return on your investment, but your money also helps fund the organisation. This in turn powers the local economy.
For example, workers have greater job security if the company is better funded. Plus, your capital helps the company grow, eventually meaning they might be able to hire new employees, creating additional livelihoods and opportunities within the community. If more people are working then, in turn, they are able to boost the local economy. It’s plain to see how your investments can have a ripple effect across whole communities. So, research the companies you’re thinking of funding and investigate their local are; you can make the most impact this way. This is why many impact investors decide to fund organisations in impoverished towns or countries.
If you want to make a difference, then invest in prosperous industries which are developing technology for a better future. In doing so, you also help to fund the local community whilst generating yourself some great capital.
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