You’ve done your research, you’ve read all the resources we gave you last month, and now you’re ready to move forward with impact investing! But how to do that?
Impact investing allows you to align your financial interests with your charitable priorities, so you need to first identify the values that speak to you. Do you believe in impact investing because it’s the right thing to do? Or because it’s a ‘two birds, one stone’ approach? The answer to this question will help you determine how much risk you’ll tolerate, as well as what kind of returns you’ll want to expect to be content with your investment.
Next, its important to explore and prioritize your charitable interests as an impact investment is different in many ways from a charitable donation. Is homelessness the cause that speaks to you most? Or minimizing recidivism? Identifying the issue area that is most meaningful for you will help you narrow your search parameters for the right investment for you.
Impact investing is still a developing area – which means two things for you: 1. Be cautious before you invest your money in an un-vetted opportunity, and 2. Returns can vary widely from opportunity to opportunity. Because of this, you should also determine what kind of support you will want when making an impact investment. Are you looking to identify an opportunity yourself, on one end of the spectrum? Or are you more comfortable investing in a mutual fund operated by a socially responsible fund manager at larger, reputable fund companies, at the other end of the spectrum? Each presents unique challenges and benefits depending on the experience you want out of impact investing!
Lastly, while Starfish Impact is not an investment, tax, or legal advisor, we wanted to share with you a few areas to give some more thought to before moving forward with impact investing.
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