3 Ways Social Investment Is Becoming a Leading Financial Opportunity

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Published: 9 November 2020
What if it were possible to invest your money in a way that not only brings you profit but helps make the world a better place at the same time? Social investment does exactly that, by creating investments in organizations with social missions that are making a positive impact in their communities and beyond. Today we’ll take a look at 3 reasons why social investment is becoming an increasingly popular investment opportunity.  

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1. Supporting a Cause that Matters to You

Social mission is very personal – what matters to some may not resonate with you. The leading reason for the upward trend in social investment is that it allows you to invest your money into causes whose core mission closely aligns with your own values and beliefs. With platforms like LENDonate leading the way, finding worthy organizations to invest in has never been easier. LENDonate has created a marketplace that brings together investors and philanthropists with non-profit organizations to create meaningful change in the world. Investors can target organizations with a diverse set of goals, such as those spearheading green initiatives like solar or renewable energy, or those that benefit women, minorities, or other under-represented groups. Sometimes you will discover nonprofits that do exciting work worthy of investment. No matter what cause you wish to support, social investment can deliver a personalized double bottom line.

2. Social Investment is Investment in Community 

Another reason that social investment is becoming such a popular financial strategy is that it allows investors to lead change in their local communities. Community funds are a form of social investment that helps improve the quality of life for citizens by addressing the unique challenges of the local community. By pooling fixed income investment in a given region, investors can help to solve a diverse set of social issues such as homelessness, access to youth and education programs for underprivileged children, access to healthcare, as well as job training and re-skilling. Many of the existing programs are severely underfunded, and social investment can provide the funds needed to help them continue their mission to serve communities in need. Firms like Cutting Edge Capital help provide insights into how to start or join these efforts. Community Investment Funds (CIFs) help bring together local citizens of all backgrounds to pool their investment into various community improvement ventures. CIFs allow communities to build wealth through a cycle of investment, growth, profit (returned to community investors), and reinvestment.  

3. Social Investment Can Be Profitable

Good investment is all about balancing risk and return. According to a recent New York Times article, social investments have been safer and have outperformed traditional funds in 2020. Social investment choices span from FDIC secured products to equity investments in a mission driven corporation. For example, LENDonate offers nonprofit specific investment notes with various credit profiles Community funds offer a blended thematic investment portfolio within the stated goals. ESG funds offer ample opportunity for equity investments with positive social and environmental influence. Even though the organization may be a non-profit or socially focused organization, investors should consider the balance of the risk and reward trade-off.  For social investors, the definition of reward includes both financial and social goals, but how they are weighted is individualized.

Conclusion

Make no mistake about it, social investment is big business. Now more than ever, investors are targeting socially conscious organizations not only for the good they do but for the investment opportunities they provide. Investment is inherently risky, but investing in socially conscious organizations can create returns that go beyond the financial and make a lasting impact in your community and the world at large.  
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