The triple bottom line business model emerged as a way for companies to measure impact beyond the financial 
bottom line. It’s a measurement of people, profit and the planet. An impact investor seeks to create social good and/or improve the health of the environment, alongside financial returns.
In the past, we looked to pure philanthropy to have a social impact. But, these emerging investors seek to place capital in scalable businesses that can reach society in ways philanthropy often can’t. This capital may be in a range of forms including equity, debt, working capital lines of credit, and loan guarantees. Examples in recent decades include many investments in microfinance, community development finance, and clean technology.
As the Rockefeller Foundation states, “it’s going to take far more money than all the philanthropies and governments have at their disposal to make a significant impact on improving the lives of all the poor and vulnerable people in the world.” Impact Investing could unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges.
Avantage Ventures Analysis published the following model in 2011 which shows where Impact Investing fits on the philanthropic to pure profit scale.
The Monitor Institute published a report entitled “Investing for Social and Environmental Impact”. They identified two types of investors: those that are impact first investors (decision making based on social or environmental impact with financial return secondary) or financial first investors (decision making based on financial return with social or environmental impact secondary).
Regardless of the type, the impact investing industry is emerging as an exciting opportunity for capital to produce competitive market returns while promoting social and environmental good. Together, philanthropists, entrepreneurs and investors can collectively have far greater impact than each alone.
