In their annual survey, the Global Impact Investing Network (GIIN) found there’s currently about $228 billion AUM in impact investments globally.1 That’s a lot, but let’s put it in context. More than $81 trillion is invested worldwide – meaning impact investments represent less than one percent of all investments. Even if you narrow it down to domestic investments, private investors in the U.S. have over $47 trillion under management.2 Meanwhile, donors in the U.S. gave $410 billion to charity in 2017 – close to double the amount in impact investments worldwide. Right now, impact investing is a rounding error. Yet its potential is immeasurable. Here’s why:
- Developing countries face an annual $2.5 trillion investment gap in key sustainable development sectors (SDG)3
- To look at one SDG – Sustainable Cities and Communities – the number of people living in “slum” conditions rose to 883 million between 2000 and 2014
- The U.S. alone has a shortage of more than 7 million affordable, available rental homes4
- Think tanks have identified impact investing as a viable solution to America's talent gap, with the goal of getting more Americans post-secondary education5
The simple truth is that trillions of dollars are needed to solve the world’s challenges – far more than government grants and philanthropy combined can ever provide.
Enterprise Community Investment, Inc., believes impact investing is the answer – or at least part of it. We’ve seen first-hand the benefits of this type of investment for communities and investors alike. When investors can look forward to creating measurable social impact while pursuing risk-adjusted returns, they’re much more likely to direct their money toward causes that need help. And there are plenty.