BizSugar.com › Raising Capital › Impact Investors: A New Source of Funding for Social Entrepreneurs

Impact investing – making investments that generate social and environmental value as well as financial return – has the potential to complement philanthropy and government intervention. It's a potent force for addressing global challenges on a large scale. Impact investors want to move beyond “socially responsible investment” (SRI) which focuses on avoiding investments in “harmful” companies or on encouraging good corporate practices related to the environment, social performance, or governance.

SRI has been around for a long time but really took off in the '80s. As of 2007, one of every nine dollars, a total of $2.71 trillion, was invested in businesses whose practices support environmental sustainability, human rights, and consumer protection, according to Social Investment Forum, a firm that advances the practice and growth of socially responsible investing.