How impact investing can add value to your money

By @chelean on
A coin dealer displays gold coins in a shop in Nice, southern France, October 8, 2008.
A coin dealer displays gold coins in a shop in Nice, southern France, October 8, 2008. Reuters/Eric Gaillard

How far can your purchasing power go? Do you pay only for the basics or can you pay for luxury? Or better yet, can your purchases do something that’s “good” aside from just contributing to a robust economy?

The following advice is not endorsed by International Business Times Australia. The article is derived from press releases sent to the company for consideration.

What if there’s a chance to do all of this? To buy something for yourself and do something for society as well? If this sounds too good to be true, then you probably haven’t heard of “impact investing” yet.

Impact investing is changing the way we look at commercialism. Simply put, this concept refers to investments used to generate funds and capital intended for both financial returns and doing something that’s socially relevant.

This is the better form of capitalism. Gone are the days when all businessmen could think about is trying to double or triple their investments. Impact investing is giving a whole new dimension on how people view their money by also considering what good it can do. Many companies are trying to catch up to this concept because not only is it a good business gamble but also they basically look good doing it.

It can be seen as anti-commercialism, if you may — most impact investment opportunities are spearheaded by companies that rely on crowdfunding to work. This means almost equal shares for stakeholders, and it also presents a big chance for small and medium enterprises to get funding and sustain operations.  

Impact investment: How it makes a difference

Though impact investment sounds unconventional, there are already a number of successful enterprises that proved this setup works. Cereal brand Kelloggs, for example, has successfully funded the W.K. Kellogg Foundation's Mission Driven Investments (MDI) via sales from its products.

Through the sales, the foundation was able to provide schools with a state-of-the-art mobile technology called Wireless Generation that helped teachers assess their students on a real-time basis. This vision adhered to the company’s belief that they are instrumental in improving the lives of children. That project was funded with a whopping US$5 million (AU$6.8 million) investment.

Impact investment has become so significant that larger companies like Goldman Sachs actually funnel their income to such significant opportunities.

What’s more, according to the report US Trust Insights on Wealth and Worth, successful millennials who have significantly broadened their financial portfolio are believed to be putting their money into various impact investments.

Wealth of opportunities

Seeing as how millennials are getting into the thick of impact investing, now is the best time to get into the action. Exponential, Inc. (XPO²), a cause-related technology marketing startup founded by French-American entrepreneur Dom Einhorn, offers the benefits of impact investing through retail — definitely something all millennials could relate to.

What’s unique about its platform is that XPO² extends financial assistance to partner foundations just by visiting the XPO² portal. Visitors can then choose to help in two ways — via direct contribution and the innovative cashless donation.

People can choose which organisation or cause to support, and by installing XPO²’s browser extension, they’ll be able an NGO to support when they buy products from participating merchants. A portion of every successful transaction will be donated to the chosen organisation. These groups get whatever support was contributed to their cause, once every month. This allows customers to extend a helping hand immediately without going through any complicated process.

In addition, this setup can be an option for companies who wish to support a sustainable corporate social responsibility initiative by aligning their brand with XPO².

This kind of startup further stresses Einhorn’s belief that NGOs and foundations will not survive if they continue with a donation-based setup. By implementing a for-profit structure, the groups supported by XPO² are assured of sustainability and growth.

Through technology and excellent marketing, XPO² is able to leverage its services in order to provide them on a platform scale.

“We bring our offering to people via one-on-one marketing strategies, at scale. Social media marketing (and specifically influencer outreach) is at the core of what makes our platform hum. Large (participation) numbers are what drive the bottom line for every stakeholder in our business model. Our aim is to instil a dose of efficiency and ‘exponential scale’ into an industry that needs it more than any other. And there is tremendous urgency in seeing us do so. Issues such as human suffering, child/senior or animal abuse simply cannot afford to wait for the ‘fat’ establishment to wake up and solve them,” Einhorn said. 

So add more premium to your money, and invest in businesses that promise not only a sound value proposition but also the chance to make a difference in the world.