Education: Investments in for-profit and non-profit schools, particularly those serving low-income communities, with the goal of improving access to quality education. This includes charter schools, schools focusing on STEM/STEAM programs, and educational technology/online learning platforms. Many impact funds measure success based on metrics like enrollment numbers, student retention, performance on standardized tests, college admission rates, and earnings/employment outcomes post-graduation.
Healthcare: Investments in companies innovating to expand access and lower costs of healthcare. This includes telehealth services, medical device companies with products aimed at emerging markets, health IT solutions, and affordable drugs/diagnostics. Impact is often assessed based on number of patients served, conditions treated, healthcare providers supported, and overall improvement in health outcomes. Some funds focus on underserved patient groups like women, children, elderly etc.
Housing: Investments in affordable housing developers and Supportive housing facilities that provide shelter combined with social services. Outcomes tracked can include number of low-income housing units built/renovated, long-term homelessness reduction rates, employment or high school graduation rates for residents. Some initiatives finance energy efficiency retrofits to make homes more sustainable.
Clean Energy: Equity and loan investments in renewable energy projects and energy efficiency solutions. Impact metrics may cover installed megawatts of wind/solar capacity, greenhouse gas emission reductions, number of households/buildings served, and jobs created. Funds often target distributed energy projects within marginalized communities. Some explore innovative business models to expand energy access in rural/off-grid areas.
Financial Inclusion: Debt and equity deals with fintech companies, digital payment platforms, and impact lending institutions expanding financial services to the unbanked and underbanked. Outcomes assessed are number of new borrowers and savers, loan repayment rates, average account balances, percentage of population within target regions gaining access to first transactional account. Success improving financial health and resilience of low-income clients is a key goal.
Agriculture: Investments aimed at smallholder farmers and food/ag value chains serve this sector’s impact goals. Outcomes monitored can include increased crop yields and incomes, food security improvements, number of farmers/co-ops supported, and job opportunities generated. Sustainable agriculture and rural development deals focus on adaptation to climate change as well. Some funds promote nutrition through investing in food processing/distribution SMEs.
Microenterprise: Debt and equity backing small businesses, often owned by women and other underrepresented groups, in developing economies. Impact metrics center around job creation, median employee wages, new products/services, revenue growth rates at the portfolio company level. Success factors also look at resilience against economic shocks and ability of businesses to access formal sector financing over time.
Beyond the individual investment level, impact investors play an active role in advocacy, standards-setting, and research initiatives serving entire sectors or issues. Leadership platforms bring together stakeholders from across industries, governments and civil society to address systemic barriers and scale promising solutions. Progress is ultimately about driving positive change benefiting marginalized communities and the planet as a whole. Robust due diligence, measurement and reporting help align capital with the United Nations Sustainable Development Goals.
Impact investing is a growing and innovative approach applying private resources towards public good across diverse sectors facing social and environmental challenges. While financial returns are still expected, impact investors see market-based solutions as critical complements to philanthropy and public spending in tackling issues of equity and sustainability on a larger scale. Close alignment between financial goals and measurable social outcomes is key to the impact investing model and its potential to create both profit and purpose.