Must-read: last paper by Oxfam and Sumerian Partners on impact investing

In April 2017 Oxfam and Sumerian Partners published a paper called “Impact investing: who are we serving?”. While impact investing is gaining visibility among policy makers and the investment community (see for example the article published by The Economist “Impact investing inches from niche to mainstream”), this paper is a most-useful reminder of what is impact investing and what should continue to drive the actors of the sector: a clear intention to maximize positive social impact.

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One of the key issues raised by the article is indeed the risk of the impact investing sector to be discredited as a result of setting unattainable expectations about financial returns. A literature promoting the attracting idea that there is no need to choose between impact and profitability could lead to a great confusion on what impact investing is really about. As stated in the report, “It is critical that reports are more balanced and representative of the breadth of experience and the existence of tensions between impact and returns”

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The authors of the report have also published a short article on the same topic in the Stanford Social Innovation Review, ‘’Marginalized Return”. The idea is to put the focus here again on what should be the primary goal of impact investors: maximize impact by providing capital in hard-to-reach markets and by supporting new products, services or business models. “Impact investing was originally created to improve the lives of others; that impact investing could also deliver financial returns to investors was a means to that end. But nowadays, achieving predefined financial returns has become the primary goal, with the needs of investors taking priority over the interests of the communities their funding seeks to benefit.” → Read article

In 2015, Jean-Michel Severino (CEO of I&P) and Pierrick Baraton published an article entitled “Development Partners, one more push for greater impact!” that investigated what lies behind the term “impact investment” and what it implies for its practitioners. → Read Article

About

Oxfam is an international confederation of 20 organizations networked together in more than 90 countries, as part of a global movement for change, to build a future free from the injustice of poverty. www.oxfam.org

Sumerian Partners advises and manages philanthropic capital on behalf of families, foundations, corporates and asset managers. www.sumerianpartners.com