Impact investing becomes new type of philanthropy
December 14, 2012
Impact investing, the practice of supporting projects that will generate both social and financial returns, is breaking down the barriers between nonprofit and for-profit organizations
, Antony Bugg-Levine, chief executive of the Nonprofit Finance Fund, told The New York Times.
Bugg-Levine asserts that the changes go deeper than word choice as foundations and organizations decide whether to "grant" or "invest" their philanthropic dollars. In fact, the difference between the two is becoming hazier, the source adds.
Successful impact investments might advance this trend. For instance, the Kellogg Foundation recently invested $5 million
in a small-scale operation called Wireless Generation that made software with the aim of improving New York City's public school system. It saw a 25.9 percent return on the deal after News Corporation paid $360 million to acquire the company.
This represents just one of the Kellogg Foundations' 20 active investments in economic security, education and healthcare.
Organizations that are looking to raise funds through grant opportunities, local campaigns or impact investments can use nonprofit financial management
solutions to improve their chances of success. The software can help program leaders identify potential donors and send out applications with accurate accounting information.