Hype or Promise

For the past 100 years, especially in the West, we have organized our resources around two basic assumptions: first, that the only way for private citizens to address social problems is by providing donations to charities; and second, that the only purpose of investing and business is to make money.

We have built layers of systems to support a bifurcated worldview that separates charitable giving and investment. Our legal and educational systems, our philanthropies and our capital markets all support activity aimed at either generating financial return through investment or pursuing social ends through charity.

Within this world and its operating structures, for-profit investors and philanthropists can retreat into safe corners where separate regulation supports their independent activities.

However, over recent decades, growing numbers of people have come to reject this bifurcated world. These people, like many of those highlighted in this issue, see the world differently and have come to be called (from the enterprise perspective) “social entrepreneurs” or (from the capital perspective) “impact investors.”

They believe both that business can make an effective and morally legitimate contribution to solving social challenges, and that investors can actively target social and environmental value creation in their for-profit investments.

We believe these are not mutually exclusive.

Examples of impact investing that targets social challenges and works with governments and donors to forge more just and stable societies are now widespread in the Americas.

Read the full text of this preview article from the Fall 2011 issue of Americas Quarterly at AmericasQuarterly.org.

Antony Bugg-Levine is CEO of the Nonprofit Finance Fund. He was previously a managing director at the Rockefeller Foundation. Jed Emerson is executive vice president of ImpactAssets.